Gold Standard ? Unobtainium Standard?

MsMorrisine

FRB Assets

Gold held "under earmark" at Federal Reserve Banks for foreign and international accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold stock is valued at $42.22 per fine troy ounce.

Value stable @ $11,041,000,000 = ~261,511,132 troy ounces.


Har, Har, Footnote 13 - estimated - Value of FRNs in Circulation

$1,102,654,000,000


FRN / gold earmarked = $4,216.47


And we are moving to a cashless society. A gold standard may be possible once again.


Manipulate the price of gold down?

Perhaps the government should manipulate the price of gold up!



Unfortunately, this only covers the $1.1Tril in currency outstanding. we have over $15.5Tril in Naional Debt... plus there is the "electronic money" in the money supply.




Unfortunately, the gold standard to simply back the outstanding FRNs is not the answer. We still owe a lot more than that. x15 more or so.... that's gold $63,247.05


Realistic?


I don't think so.


Perhaps we should use some other commodity, like unobtainium.





So, I ask you, IF gold suddenly rises to $4216.47 and we have a fully gold backed currency.... do you think that's where the threat to the dollar's value ends ??????

derryb

The threat to the dollar comes from devaluation by its controllers. Gold price reflects the threat. Threat to the dollar's value will not end until the FED ends. Backing the dollar with some amount of gold will do no good as that amount backing it will be periodically adjusted downward to allow for continued reckless soverign spending. Any law created to peg to gold can be later changed as necessary to avert a "crisis." Confiscation of private gold would more than likely be a result of pegging to gold.

MsMorrisine

<< <i>The threat to the dollar comes from devaluation by its controllers. Gold price reflects the threat. Threat to the dollar's value will not end until the FED ends. Backing the dollar with some amount of gold will do no good as that amount backing it will be periodically adjusted downward to allow for continued reckless soverign spending. Any law created to peg to gold can be later changed as necessary to avert a "crisis." Confiscation of private gold would more than likely be a result of pegging to gold. >>




why confiscate?


just change the peg.


no?

derryb

If you're gonna back a currency with tomatoes, you want to hold all the tomatoes.

jmski52

When I consider all of the time in my entire life that I've spent working for dollars, and then I ponder what the Fed does to create $Trillions in the swipe of a key - it renders the sum total of all my life's endeavors subject to the whim of someone I don't know - who doesn't have my interests in mind at all.

This causes me to have a severe reaction to any continuation with the present scheme. The answer - of that I am not certain.

roadrunner

So, I ask you, IF gold suddenly rises to $4216.47 and we have a fully gold backed currency.... do you think that's where the threat to the dollar's value ends ??????

No, because the currency in circulation (most of it overseas) is only a fraction of the $2.7 TRILL base money supply (M0) which also includes bank reserves. For the past 5-6
years the movements in M0 has closely paralled the price of gold and silver.

cladking

Gold has always been a stupid thing to back currency but it wonby default since
there's nothing better and tradition held that gold was valuable. As money gold
isn't quite as stupid since it imposes fiscal discipline. But it's still highly susceptible
to sudden changes in its percieved value which can destroy even vibrant and sound
economies.

My guess is that if we backed the currency with the productive value of the econo-
my that it would end most of the problems. In a sense this is all gold or fiat money
is already; a share of the wealth. The value of the economy should be divided into
approximately as many shares as there are people and each share is the unit of cur-
rency. Money has time value and this shouldn't be stolen and more besides by in-
flation and bankers. Money itself should pay a small dividend as shares are redeemed.
Circulating currency is parts of these shares where perhaps a "dollar" is a ten thou-
santh of a share. It's not necessary to make money out of precious metal since it has
value that is stable and growing.

Of course if government is allowed to spend more money than ity has then it will
dilute the value of shares by issuing more. Ultimately in a democracy this is the fault
of the majority for voting for tax cutters or spendthrifts.

MsMorrisine

<< <i>Gold ... But it's still highly susceptible
to sudden changes in its percieved value...


My guess is that if we backed the currency with the productive value of the econo-
my that it would end most of the problems. >>




talk about sudden changes in value.

GDP going up and down without any more predictability than gold.

jmski52

We've got to end the addiction to free government stuff and start rewarding the producers. Way too many government agencies and way too many government union employees.

EagleEye

You are assuming that a gold-backed currency has to one-to-one.

I think if they ever went with a gold standard, they would start out with a modest 10% backing. Then as a crisis arose, they would simply lower the margin requirement, until at some point it would be backed by a promise alone - back to square one. Cynical, yes, but That's what I think.

"They" in this instance is the world market, not the US, since one country cannot exist on a gold standard without very strict controls on its currency being exported. China's isolationist controls over the Renminbi (prior to 2010) is an example of the controls needed to isolate a currency. Of course, they have a "US dollar" standard, not a gold standard.