Is there enough gold......................?
jmski52
Posts: 22,820 ✭✭✭✭✭
Yesterday, in the car, I was listening to another money advice show and the topic touched on gold. The interviewer was talking with a trader who blithely made the statement that "there isn't enough gold to back the dollar because there are so many dollars out there", or something close to that.
My opinion is that if they wanted to back a currency with something, they would. Gold seems more like a natural for that idea, than not. I am a realist, and I don't think that our government would allow gold as backing for the dollar anytime soon.
However, it seems to me that having too many dollars out there is unrelated to whether or not gold could function as the backing for a currency. It seems to me that price is the main problem - the price of gold is somewhat an embarassment to governments in general.
There's a joke we used to say in college - "We all know who is doing what to whom, all we need to establish is the price."
What say you?
My opinion is that if they wanted to back a currency with something, they would. Gold seems more like a natural for that idea, than not. I am a realist, and I don't think that our government would allow gold as backing for the dollar anytime soon.
However, it seems to me that having too many dollars out there is unrelated to whether or not gold could function as the backing for a currency. It seems to me that price is the main problem - the price of gold is somewhat an embarassment to governments in general.
There's a joke we used to say in college - "We all know who is doing what to whom, all we need to establish is the price."
What say you?
Q: Are You Printing Money? Bernanke: Not Literally
I knew it would happen.
I knew it would happen.
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"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Could they "devalue" gold to bring it into a workable price range? >>
How would that work? Don't forget that under a true gold standard paper money can be freely converted to gold and vice versa.
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
You just have to destroy 49 of every 50 dollars . Whatever, its fiat right ?
The dollars isn't a static number look at this table if we wait a year it will be 59 of 60 dollars
aug 30 2012 money supply
Thats without QE3
The current debt would prevent a return to the gold standard
For those that believe the Dollar needs to be backed with some type of metal that has value, it seems silver would be the more realistic choice- and even that would be tough
Experience the World through Numismatics...it's more than you can imagine.
In God We Trust.... all others pay in Gold and Silver!
<< <i>If would have to be a basket of metals. Gold,Silver, Platinum, Palladium and maybe a fraction of proven oil reserves. It could be done...... but the powers at be will not let it happen. >>
True........until they have no other choice (or put another way, no other options).
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Knowledge is the enemy of fear
<< <i>If you want to back the dollar with something people can use or need, then make it corn. Hey, its yellow, so that should satisfy the warm fuzzy feeling. >>
or Silver?
Menomonee Falls Wisconsin USA
http://www.pcgs.com/SetRegistr...dset.aspx?s=68269&ac=1">Musky 1861 Mint Set
<< <i>
<< <i>If you want to back the dollar with something people can use or need, then make it corn. Hey, its yellow, so that should satisfy the warm fuzzy feeling. >>
or Silver? >>
Sure, they grow white corn. Win win for everyone.
Knowledge is the enemy of fear
Or if they wanted to improve its relative worth, make it worth 1/1000th. Or 1/100th. The amount of gold available is immaterial. It's just the ratio of gold to dollars.
--Severian the Lame
<< <i>
<< <i>
<< <i>If you want to back the dollar with something people can use or need, then make it corn. Hey, its yellow, so that should satisfy the warm fuzzy feeling. >>
or Silver? >>
Sure, they grow white corn. Win win for everyone.
silver queen variety
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>If they backed the dollar with gold, a dollar would be worth 1/1650th of an ounce.
Or if they wanted to improve its relative worth, make it worth 1/1000th. Or 1/100th. The amount of gold available is immaterial. It's just the ratio of gold to dollars. >>
Exactly right. There's nothing barring backing. We could choose any ratio or standard we'd like. But I wouldn't choose corn though considering the potential for it to
go toxic during droughts.
Lets leave the corn alone people. I eat 2 ears every night in the summer when its in season around here.
If the Feds start debasing the corn I'll need to eat a dozen ears at a sitting . I'll be fat as a house in no time
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>"Gold is Backed by Nothing, but US Dollar Backed by Federal Reserve"
+1
until they are forced to and even then they may decide feet first is best. I'd stock up on ASE's. If push comes to shove use that as the new currency.
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Wasn't the dollar backed by Silver?
and the coins silver?
Gold coins had denominations.
So how did any gold in reserve, or how would gold in reserve back a bill note directly?
Who would trust a gold backing anyway now?
we could back all dollars with an ounce of gold if the price of gold was artificially raised to several trillions dollars an ounce. A move I fully endorse.
that said, the real question is if it is practical for the world to go back to a gold standard. Some countries with low gold reserves might be in trouble, especially if they lack the means to acquire more gold.
Also, while one talking head on bloomberg noted that money supply wasn't always 1:1 back in the gold standard days and even ran to over 2:1, I still think our nations constant current account deficits would be trouble for maintaining either a gold standard or a fiat currency standard. neither can handle the constant yearly money outflows over decades and decades of spending.
<< <i>
<< <i>"Gold is Backed by Nothing, but US Dollar Backed by Federal Reserve"
+1 >>
paid basher
<< <i>as mentioned, it is fixable through artificial prices.
we could back all dollars with an ounce of gold if the price of gold was artificially raised to several trillions dollars an ounce. A move I fully endorse.
that said, the real question is if it is practical for the world to go back to a gold standard. Some countries with low gold reserves might be in trouble, especially if they lack the means to acquire more gold.
Also, while one talking head on bloomberg noted that money supply wasn't always 1:1 back in the gold standard days and even ran to over 2:1, I still think our nations constant current account deficits would be trouble for maintaining either a gold standard or a fiat currency standard. neither can handle the constant yearly money outflows over decades and decades of spending. >>
I think the backing was fine up until 1913 or so when it started to get out of hand for some reason
A year or so back someone posted a good link that advanced the theory that FDR's gold confiscation happened because the FED let the number of gold certificates outstanding get way out of sync with the gold reserves. I tried to search the forum for it but I can't get search to return anything for months now .
<< <i>How was it ever a gold standard anyway?
Wasn't the dollar backed by Silver?
and the coins silver?
Gold coins had denominations.
So how did any gold in reserve, or how would gold in reserve back a bill note directly?
Who would trust a gold backing anyway now? >>
there were gold and silver coins.
and gold and silver certificates.
there were dollar certificates paid in silver coin.
on the other hand, here is a nice one at the Smithsonian:
and here is a $50
A balanced budget would be a much better tool in restraining excessive creation/spending. Money's soundness is not dictated by what backs it - soundness is dertermined by the fiscal responsibility of its issuers.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
gold on hand
Currency in circulation
check the fed res website.
<< <i>
<< <i>"Gold is Backed by Nothing, but US Dollar Backed by Federal Reserve"
+1 >>
I could be wrong but it's not the reporters' opinion that 'gold is backed by nothing'.
Just before she says this, she says, "according to Todd Hirst......"
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
"Todd Hirst (Hirsch?) says that some investors aren't comfortable both what gold is backed by, or if it's backed by anything at all, compared to something like the US Dollar.
Investors are comfortable that the US Dollar is backed by the American government, so no matter what is happening to the American economy, something like the US Dollar is backed by the Federal Reserve that's going to be around a year from now - that's a much more comfortable (emphasis added) investment for them."
I knew it would happen.
I think I'd wager that the odds of gold being around a year from now are considerably higher than the odds the Fed will be.
The Fed is merely a 3rd party conduit. The real power behind the dollar is the full faith and confidence in the US govt.
The Fed is not part of the US govt...even if their member banks act like they "own" it.
Gold is backed by the full faith and credit of all the nations of the entire world. Dozens of central banks that hold it can't all be wrong.
Whatever is "backing" gold, it's well ahead of any "backing" that paper currencies and paper assets can produce.
What is gold backed by?
Knowledge is the enemy of fear
Universal recognition as a store of value, especially in troubled times and troubled places.
I knew it would happen.
<< <i>What is gold backed by?
Universal recognition as a store of value, especially in troubled times and troubled places. >>
.........since before recorded history. Don't forget that China, the US, and other major countries hoard gold.
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>What is gold backed by? >>
<< <i>Universal recognition as a store of value, especially in troubled times and troubled places. >>
with no counterparty risk.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>What is gold backed by?
Universal recognition as a store of value, especially in troubled times and troubled places. >>
Like a church, or mosque or temple or synagogue?
Knowledge is the enemy of fear
<< <i>
Was it this one? >>
Thats the one , thanks
<< <i>
<< <i>What is gold backed by?
Universal recognition as a store of value, especially in troubled times and troubled places. >>
Like a church, or mosque or temple or synagogue?
yep, like this one:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
but what would they buy the gold with? trade for government hard assets?