What do you think the chances are that a country could go back to the silver standard?
BigE
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Do you think we could ever see a new 90% legal tender circulating anywhere, and what do you think the denominations and composition would be?--------------------------------BigE
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Knowledge is the enemy of fear
But I do like the idea! There would be so many more potential collections to create.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
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<< <i>Do you think we could ever see a new 90% legal tender circulating anywhere, and what do you think the denominations and composition would be?--------------------------------BigE >>
A gold standard would be unlikely, but might be possible.
A silver standard by itself, no -- gold would be used before silver. And if just silver, the amount of silver out there is such an unknown that it would cause all sorts of problems. For example, do individuals hold 1 billion ounces of silver or 10 billion? Imagine not knowing if there M1 (currency and the like) was $1.7 trillion or $170 billion? That would make life difficult for economists.
Gold+silver (bi-metalism), like we used to have in the U.S.? Unlikely, for the same reasons as a silver-only standard, and because bi-metalism proved to be problematic (one was always somewhat over- or under-valued compared to the other), and because of the industrial use of silver.
Of course...
I see the 1oz coins would be valued at $100 or better I would think. If the world financial systems fall apart, everything will be re-evaluated including the need/legality of electronic money.
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Yeah but a $100 coin would be at least 5 oz, you'd sure as heck know you had a hundred dollars in your pocket!
"If the world financial systems fall apart, everything will be re-evaluated including the need/legality of electronic money."
Is there really any alternative to shedding this poisionous paper and huge load of steaming debt? I really don't think a bank holiday would do it but a bank holiday with some kind of revaluation would make things work again in the US. Fannie needs to sell those houses at auction and all the local govt forclosures need to do the same thing. Someone is gonna have to take it in the shorts and all the money boys are zeroeing in on a bullseye they think they see on the consumer/taxpayers backs and telling all their congress boys about how the mullets are gonna to have to just suck it up, spread it around, all work together to overcome this hardship...I'm wishing that some consumer advocate or one of our leaders with a half a set would just turn around and say..."Bite me, consumers ain't buying your debt so you bought it, you eat it!"
Ulitmately, Europe will have to visit the revaluation, bank holiday question themselves or they crater. I noted that 40% of the greek bailout was on US backs so contigation is alive and well...why are we covering foreign bailouts and our bailouts too...do we look easy or what and a follow up question...where are we getting the money, maybe it's those bond thingies that everyone is so keen on handicapping? Look for a US holiday soon, keep some cash around...doesn't hurt to be prepared. Ha...they thought the domino theroy was about communism, no one mentioned debt taking out governments and it's so much cheaper than war. Noticed that China has been really really quiet during all of this, hummmmm...I wonder if anyof the europeans knocked on their door for a hand out.
That is only after I have been elected as your Supreme Enlightened Father King/President for life.
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<< <i>How does that old saw go? Two chances, slim and none. We could conceivably be without any coins sometime in the future. >>
I think this is a first time I agree with you 100%
There simply isn't enough silver because it's been used up. If silver were
monetized again the tiniest coin would contain hundreds of dollars worth
of silver. Just divide the GNP by the available silver of maybe half a billion
ounces. If you figure that this would lead directly to a loss of confidence
that would force a monetarization of the debt then a coin the size of a mor-
gan would be about $10,000,000.
Gold would be more likely but silver won't be used again for the foresee-
able future.
The per capita amount of silver available is simply far too tiny to monetize it.
<< <i>How does that old saw go? Two chances, slim and none. We could conceivably be without any coins sometime in the future. >>
It's the Chance Bros....Slim, Fat & Noe.
http://www.idahoreporter.com/2010/idahoans-may-soon-be-able-to-use-silver-to-pay-taxes/
Yes I do. I believe the US will split up, probably into 4 or 5 separate entities, in our lifetimes. It will not be good times but if we are lucky it will be quick. I believe one or maybe two of the successor entities will be on some type of metallic standard. For example, here's a map of the US as analyzed by similar interests Facebook links. In an example like this I suspect "Greater Texas" would be on some pm standard for sure and possibly "Mormonia" as well.
Sorry man, that position has been filled.
I knew it would happen.
Ok, now that I have illustrated that there is far too little of the metal to facilitate commerce efficiently, let me advance this idea. Another member talked about revaluation. A true silver or gold standard could only be put into use with a controlled value of the metal. The U.S. gold standard only worked because gold's price went unchanged for a hundred years, and then again for another 30 years after the "great fleecing" of American's personal wealth. If the world's leading financial powerhouses decided to get together and adopt a silver standard, it MAY work. But with silver being a globally traded commodity, there is now way a single nation could enact a "standard". This of course is due to the fluctuating value. But if the top 10-15 financially stable nations did get it together, they may have enough influence (and silver stockpiles/production...that gets Mexico in) to pull it off. Silver would have to immediately be revalued at a fixed price relative to a new paper currency. This new currency would then be backed by the metal on hand (I know, im dreaming now!), and would need a very high public transparency to garner the faith of the people to prevent physical metal hoarding. Only then could we return to a metals backed monetary system.
The downside to this is that governments would have to surrender their most precious asset....their sovereignty of being able to produce "money" at will to manipulate their economies. Ask Germany how thats working out for them! I think its an interesting dichotomy in that a metals backed currency will be very much despised by any government that has to implement it, yet may be the absolute resolution to returning the citizen's faith in that government's monetary system!
If one country went on a silver standard, its Treasury would likewise get depleted by people trading the silver-backed currency out with unbacked money. The only way to counteract this would be the inflate the value of the silver-backed currency, thus causing the very thing you are trying to prevent.
The answer would be for the entire world to get on the same standard. A world currency. I don't think we want that either, do we. Going on a gold or silver standard would just bring back the problems we dealt with 100 years ago or create problem we never envisioned.
Within 20 years, I believe we'll be in a cashless society, with everyone having "money cards" - or something implanted
Derivatives become increasingly hard to put a value on, which seems to be part of the intent by the marketers of derivatives. If you can't figure something out, you just throw up your hands and now it's called fairly-valued by the FASB? I think not. We are seeing scams built upon scams. Guess who loses in the end?
I'm sorry to say it this way, but in this day & age, if a person buys into the stock market or bond market under those types of rules, then he gets what's coming to him. Same goes for anyone who keeps retirement funds in their company's plan. Ignorance isn't bliss and shouldn't be promoted as such.
The problem is fractional reserve banking, which permits the creation of currency by people (bankers) who should have no authority to be creating anything.
I knew it would happen.
<< <i>The problem with a "gold-backed" or a "silver-backed" currency is the same problem we have now, except that the problem we have now is 4th or 5th generation derivatives of the original instruments, which themselves were only a "fractional reserve" currency and not the real thing.
The problem is fractional reserve banking, which permits the creation of currency by people (bankers) who should have no authority to be creating anything. >>
The problem is that the tail will wag the dog eventually I believe. All its gonna take is the failure of a major currency (most likely the Euro once Germany bails) for human beings to be much more leery of paper money backed by nothing. Then if the dollar fails (I believe i'll witness this during my lifetime), governments will be absolutely forced into devising a new monetary system that has the faith of the people. Metals backed is the only option. But again, the key to its success will be full and complete transparency. If people become unwilling to accept paper backed by nothing, what other choice will the world's governments have?
Gold would have to be in the neighborhood of $25,000 per ounce to back currency
and silver would have to be around $100,000 per ounce. While gold would be quite
steady comparatively, currency based on silver would be all over. Mere rumors would
ruin the currency overnight or cause massive spikes in its value. Planning would be
impossible. Most people would be afraid to hold money and keep it in the form of oats
or houses.
It simply isn't a viable alternative. It would be about as useful as a radioactive com-
pound with a short half life or tse tse flies for a basis of value.
...
and silver would have to be around $100,000 per ounce."
Hummmm...true if the metal were monetized at 1:1 but if it was fractionally monetized at say 1:10 or even 1:20 in physical metal coin. It could be done with paper too, sort of a silver certificate/gold certificate type scenario where "Will redeem to bearer 1/10 oz. .999 pure silver upon demand". I think it would be very doable and not some kind of thing where they say they have the gold stored in Ft. Knox and it's covered...we've seen it covered already with our SS and that's BS. Your money would be worth more or less every day, it would add some spice to our money but it would always be worth something because gold and silver have never been worth nothing on the international market. And, when you think about it, our money fluctuates daily anyway with the international exchange rates so it's not like it has a static value every day, it already floats. Right now all we have is paper backed by nothing but the full faith and trust of something.
But, with that being said, it would push gold and silver up in value but that's today's value. In the future it may have different value and that's where we get revaluation of the USD. Nifty huh?
Gold Certificate
mh, think about it. "They" don't want a hard money system.
I knew it would happen.
<< <i>mh, think about it. "They" don't want a hard money system. >>
Agree. Paper is easy to create out of thin air but PM's are impossible to create out of thin air. "They" enjoy spending too much to give up their paper standard.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>PM's are impossible to create out of thin air What about ETF's? >>
They aren't real PM's---they are make-believe PM's.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Gold could work and ultimately I believe we will revert to some sort of hard asset backed currency where gold plays a major role. While there's probably not enough gold to really have an effective 1-1 system I don't really like the idea of a 1-10 or 1-20 or 1-50 system either. Isn't the latter just another way to support fractionalized reserve banking? OK, so who keeps an eye on the records and bookkeeping of the banks? (ie we've just been through this fiasco of the last 12 years with "inventive" accounting and "structured investment vehicles"). The banks could go out and procure $10 BILL in gold but print $200 BILL in currency on a 20-1 system. That seems a lot like the system we already have.
But if one looks back to the 1800's when American produced some of the greatest economic growth on record, all that was done on a gold or silver standard.....or the reasonable semblance of one. It should be understood that we had no official gold standard from 1862-1879. Still, there was tremendous growth during the 1880-1900 period even while the nation was still in a decades long recession. Funny that immigrants flocked to our shores during a long term "depression." (ie we had gold/silver). If one looks at history the greatest empires became powerful on a gold standard (Romans, Spain, France, England, USA). It was when each nation left the gold standard that things began decaying. Everyone came to the US for help during the 1913-1933 period because the USA still had a gold standard. England started losing contact with theirs at the start of WW1 as economic power shifted to the US. Odd that while everyone sees the gold standard as not viable and "too hard" it was that same standard that brought wealth to each of those 5 empires listed above. Once their gold was gone their wealth too had vanished. Funny how that works.
rodarunner
This makes no sense to me, and warrants a further explaination RR. If the metal is "revalued", then there becomes plenty of silver to accomplish the task. At the current $19/oz, you are correct. But in a "standard" type system, there WOULD be a drastic revaluation at a fixed price. If the powers that be decided to make 1oz of silver the equivalent to $10,000, then there becomes more than enough silver to become a hard backer to paper.
<< <i>"There's no chance of a 100% silver backed currency as there is just no supply of it."
This makes no sense to me, and warrants a further explaination RR. If the metal is "revalued", then there becomes plenty of silver to accomplish the task. At the current $19/oz, you are correct. But in a "standard" type system, there WOULD be a drastic revaluation at a fixed price. If the powers that be decided to make 1oz of silver the equivalent to $10,000, then there becomes more than enough silver to become a hard backer to paper. >>
10K an ounce? I like that. I would be a zillionaire
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<< <i>
<< <i>"There's no chance of a 100% silver backed currency as there is just no supply of it."
This makes no sense to me, and warrants a further explaination RR. If the metal is "revalued", then there becomes plenty of silver to accomplish the task. At the current $19/oz, you are correct. But in a "standard" type system, there WOULD be a drastic revaluation at a fixed price. If the powers that be decided to make 1oz of silver the equivalent to $10,000, then there becomes more than enough silver to become a hard backer to paper. >>
10K an ounce? I like that. I would be a zillionaire
Even at a lofty $10,000/oz, you would need 100,000 ounces just to have a billion dollars! I know a few PM heavy hitters....not a single one is even remotely close to 100,000 oz of silver!
Gecko, you know as well as I do that a billion dollars doesn't go very far these days.
I knew it would happen.