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Offline rich_t

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Gold Standard
« on: November 19, 2009, 06:03:59 PM »
I saw a post on another thread here that prompts me to ask the question.

What economic harm, if any, would result from backing up our current paper currency with hard currency such as gold, silver etc... The paper currency being redeemable on demand for hard currency of intrinsic.

I still have a few old silver certificate dollars that I got from my grandfather.

Back in his day the paper dollar was actually backed up by something that had intrinsic value.

I admit that I am not an ecomomist, therefore I look forward to hearing what others think about the issue.
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Offline bkg

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Re: Gold Standard
« Reply #1 on: November 19, 2009, 06:15:25 PM »
There's really not enough gold (currently available) to back the currency, so the economy would likely collapse. But hell, it's happening anyway, so let's just tear the band-aid off faster and get on with the solid recovery!
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Offline DumbAss Tanker

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Re: Gold Standard
« Reply #2 on: November 19, 2009, 06:22:30 PM »
What would it matter, really?  Gold is only worth what it will buy, intrinsically it's pretty damned useless.  Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well. 
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Offline rich_t

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Re: Gold Standard
« Reply #3 on: November 19, 2009, 06:23:51 PM »
Quote from: bkg on November 19, 2009, 06:15:25 PM
There's really not enough gold (currently available) to back the currency, so the economy would likely collapse. But hell, it's happening anyway, so let's just tear the band-aid off faster and get on with the solid recovery!

That's how I feel about it too.  The ecomonic failure is coming, it is merely a matter of time.

I'd rather be on the front lines than forcing it upon my grandkids.
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"The American people will never knowingly adopt socialism. But, under the name of 'liberalism,' they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." --Norman Thomas, 1944

Offline zeitgeist

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Re: Gold Standard
« Reply #4 on: November 19, 2009, 06:34:06 PM »
Quote from: rich_t on November 19, 2009, 06:03:59 PM
I saw a post on another thread here that prompts me to ask the question.

What economic harm, if any, would result from backing up our current paper currency with hard currency such as gold, silver etc... The paper currency being redeemable on demand for hard currency of intrinsic.

I still have a few old silver certificate dollars that I got from my grandfather.

Back in his day the paper dollar was actually backed up by something that had intrinsic value.

I admit that I am not an ecomomist, therefore I look forward to hearing what others think about the issue.


You might find this article provides an interesting discussion of gold and fiat money>
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Offline rich_t

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Re: Gold Standard
« Reply #5 on: November 19, 2009, 06:37:29 PM »
Quote from: DumbAss Tanker on November 19, 2009, 06:22:30 PM
What would it matter, really?  Gold is only worth what it will buy, intrinsically it's pretty damned useless.  Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well. 

Well gold and silver has had intrinsic value in all of recorded history, as have certain precious and semi-precious jewels.

I suspect this is due to rarity of the item.  That whole suppy and demand issue perhaps?

What is the dollar currently backed with?  The amount of ink and tree pulp it takes to print it?

Or is it more complex?  Is the value of the dollar now tied to the slave labor value of those yearning to earn more, while the printing presses continue to make it worth less?

What is the buying power of the dollar now compared to the buying power of the dollar when it was backed by gold or silver?
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"The American people will never knowingly adopt socialism. But, under the name of 'liberalism,' they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." --Norman Thomas, 1944

Offline rich_t

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Re: Gold Standard
« Reply #6 on: November 19, 2009, 06:41:05 PM »
Quote from: zeitgeist on November 19, 2009, 06:34:06 PM
You might find this article provides an interesting discussion of gold and fiat money>

That is an excellent link.

I've been well aware of the current fiat money concept in current use for quite some time.  Hopefully others here will benefit from your link.
« Last Edit: November 19, 2009, 06:48:43 PM by rich_t »
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"The American people will never knowingly adopt socialism. But, under the name of 'liberalism,' they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." --Norman Thomas, 1944

Offline rich_t

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Re: Gold Standard
« Reply #7 on: November 19, 2009, 06:44:13 PM »
Quote from: DumbAss Tanker on November 19, 2009, 06:22:30 PM
What would it matter, really?  Gold is only worth what it will buy, intrinsically it's pretty damned useless.  Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well. 


It wasn't that long ago that most other world currencies were pegged to the US dollar.  All currency is pegged to something seen of value to those using the standard of the day.

The US dollar is badly slipping as the "standard" and has been for decades.
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"The American people will never knowingly adopt socialism. But, under the name of 'liberalism,' they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." --Norman Thomas, 1944

Offline bkg

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Re: Gold Standard
« Reply #8 on: November 19, 2009, 06:46:09 PM »
Quote from: DumbAss Tanker on November 19, 2009, 06:22:30 PM
What would it matter, really?  Gold is only worth what it will buy, intrinsically it's pretty damned useless.  Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well. 

technically, the dollar has no intrinsic value either.  :-)
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Offline rich_t

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Re: Gold Standard
« Reply #9 on: November 19, 2009, 06:49:41 PM »
Quote from: bkg on November 19, 2009, 06:46:09 PM
technically, the dollar has no intrinsic value either.  :-)

Quite correct. 
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"The American people will never knowingly adopt socialism. But, under the name of 'liberalism,' they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." --Norman Thomas, 1944

Offline Duke Nukum

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Re: Gold Standard
« Reply #10 on: November 19, 2009, 07:45:40 PM »
The people currently running our economy remind me of the Golgafrinchans who made leaves their currency when they first crashed into the earth tens of thousands of years ago.
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Offline Carl

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Re: Gold Standard
« Reply #11 on: November 19, 2009, 07:52:38 PM »
Quote from: DumbAss Tanker on November 19, 2009, 06:22:30 PM
What would it matter, really?  Gold is only worth what it will buy, intrinsically it's pretty damned useless.  Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well. 

I am not sure how you could do it today as there was a fixed/oz price of 20.00.
Since it is commodity traded now and worth what someone will pay as an investment vehicle how would one get back to it having a finite value?
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Offline JohnnyReb

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Re: Gold Standard
« Reply #12 on: November 20, 2009, 05:58:27 AM »
From the link supplied.....http://www.kwaves.com/fiat.htm

A good barometer of the size of a currency's leverage is the percentage of total  Debt to GDP  (Gross Domestic Product). Currently, that percentage (299%) is higher than the level the nation experienced during the depression era 1930's. With budget deficits projected for 2003 and 2004, the US will soon exceed this already inflated level.

Sooooooo...If that was true then(2003/4), what does that mean for 2010 and 2011?

Tighten your seatbelt, the ride is gonna get bumpy.
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“The American people will never knowingly adopt socialism. But, under the name of ‘liberalism’, they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened.” - Norman Thomas, U.S. Socialist Party presidential candidate 1940, 1944 and 1948

"America is like a healthy body and its resistance is threefold: its patriotism, its morality, and its spiritual life. If we can undermine these three areas, America will collapse from within."  Stalin

Offline zeitgeist

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Re: Gold Standard
« Reply #13 on: November 20, 2009, 07:36:48 AM »
Gold, as always, is a very interesting topic to ruminate about on a rainy day.  

First and foremost I am not a gold bug but there are plenty out there.   That said, like many others I do wonder about the future price of gold and its implications for out economic well being.  Maybe it is time to put on a gold leaf  helmet an take a look at some other facets of this fascinating issue. :tinfoil:

Why do we (or do we) still have enormous reserves of gold?  Try looking at a couple articles addressing this issue but keeping that helmet ready at all times.  There are all types out there including FreeStaters, Paulistas, anti FedFolk, the list goes on an on.

Quote

Doc 100.0.5.2..........10 of 37...
About Fort Knox Gold:       http://www.fgmr.com/article-archive.html
 In the 1970's a very courageous gentleman named Edward Durrell claimed that
substantially all of the US Gold Reserve being stored at Ft. Knox was gone.
Only 1,000 tonnes or so of the 8,500 tonnes supposedly being stored there
remained. The rest had been secretly taken from Ft. Knox and shipped to
London in 1967 and early 1968 for sale by President Johnson in an ill-fated
attempt to keep the price of Gold at $35 per ounce.

About Fort Knox Gold link>

In an attempt to be bipartisan we also have this:

Quote

Washington Post / Big Money:

Buried in the Treasury's International Reserve Position report is an intriguing bit of math. The document details the total amount, by weight, of the Treasury's gold reserves, plus a dollar value for said metal. But some fast division reveals something interesting: The Treasury marks the value of its gold at $42 an ounce, the price settled on in 1973...




Link to Huffy Post article>

Interesting don't ya think??  Heck maybe later we can look at the early origins, the Alchemists.

ETA Tag / link fix
« Last Edit: November 20, 2009, 08:00:49 AM by zeitgeist »
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