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Did we really have to go off the gold standard?
pcunix
Posts: 620 ✭
Disclaimer: any resemblance I have to someone who actually understands these issues is only because of our shared genetic heritage. Like many who have opened their yaps on this subject before, I KNOW NOTHING. Therefor, there is no need to throw stones nor suggest unpleasant details of my specific genetics; rather, just 'splain it to me like you would to an unusually backward child.
So: I understand that this was done because there was more circulating gold backed paper than there was gold to pay it.
Why couldn't we have raised taxes on the fat cats instead (aside from the fact that then, as now, the fat cats had a lot of political influence)?
I also understand that floating currencies can buffer economic crashes. Putting aside what happened to my retirement saving in 2001 and everything else that happened since we abandoned gold , couldn't just as good (and maybe better) results have come from raising and lowering taxes?
Please read my disclaimer again before you bite my head off and if that doesn't work, happy chewing!
Here's another thought: pick an older home where the neighborhood hasn't gone to crime or changed radically. I've done this with a few places and it seems to me that the house could be bought for pretty much the same number of $20 gold pieces before 1933 and right up to today - with some minor fluctuations here and there, of course. So.. ??
So: I understand that this was done because there was more circulating gold backed paper than there was gold to pay it.
Why couldn't we have raised taxes on the fat cats instead (aside from the fact that then, as now, the fat cats had a lot of political influence)?
I also understand that floating currencies can buffer economic crashes. Putting aside what happened to my retirement saving in 2001 and everything else that happened since we abandoned gold , couldn't just as good (and maybe better) results have come from raising and lowering taxes?
Please read my disclaimer again before you bite my head off and if that doesn't work, happy chewing!
Here's another thought: pick an older home where the neighborhood hasn't gone to crime or changed radically. I've done this with a few places and it seems to me that the house could be bought for pretty much the same number of $20 gold pieces before 1933 and right up to today - with some minor fluctuations here and there, of course. So.. ??
0
Comments
<< <i>I believe the old standard was that a Double eagle could buy one good quality men's suit. >>
Still true today, I think although I haven't bought a suit since 1985
But yeah: I just checked gold prices around that time and that's about what I paid.
It seems that there was never an economic panic, never a boom and bust cycle, never a depression, never a war, no problems at all, as long as we had a gold standard, all was well.
THEN, we went off the gold standard, oh, woe, lifespans decreased, the quality of life plummeted, it was like a new dark age!
I would not be typing this message from my cave, eating worms and grubs, and dying of the plague, if only we were still on THE GOLD STANDARD
Wai.. wha?
Liberty: Parent of Science & Industry
The backing of a currency by a widely accepted commodity helps stabalize said currency. It is more difficult to manipulate.
Gold standard cons:
Having a currency backed by a gold commodity does not easily allow for the rapid expansion of said economy during times of economic growth. Also, a fiat currency is easily manipulated by a few people/organizations via interest rate and the buying/selling of bonds.
What the heck does "raising taxes on the fat cats" accomplish or have to do with the discussion?
<< <i>It's always amusing to read about how miserable the economy and life for Americans became, once we went off the gold standard.
It seems that there was never an economic panic, never a boom and bust cycle, never a depression, never a war, no problems at all, as long as we had a gold standard, all was well.
THEN, we went off the gold standard, oh, woe, lifespans decreased, the quality of life plummeted, it was like a new dark age!
I would not be typing this message from my cave, eating worms and grubs, and dying of the plague, if only we were still on THE GOLD STANDARD
Wai.. wha? >>
Quite the contrary. That's why I gave the link to the Wikipedia list of recessions etc.
That wasn't an answer to my question though..
<< <i>Gold standard pros:
The backing of a currency by a widely accepted commodity helps stabalize said currency. It is more difficult to manipulate.
Gold standard cons:
Having a currency backed by a gold commodity does not easily allow for the rapid expansion of said economy during times of economic growth. Also, a fiat currency is easily manipulated by a few people/organizations via interest rate and the buying/selling of bonds.
What the heck does "raising taxes on the fat cats" accomplish or have to do with the discussion? >>
If you raise taxes, you suck money back in and depress the economy and vice versa. Assuming that you can actually get the money, of course.
<< <i>wrong forum >>
Ahh, yes. Excuse me. My mistake. Shutting my mouth now.
<< <i>
<< <i>Gold standard pros:
The backing of a currency by a widely accepted commodity helps stabalize said currency. It is more difficult to manipulate.
Gold standard cons:
Having a currency backed by a gold commodity does not easily allow for the rapid expansion of said economy during times of economic growth. Also, a fiat currency is easily manipulated by a few people/organizations via interest rate and the buying/selling of bonds.
What the heck does "raising taxes on the fat cats" accomplish or have to do with the discussion? >>
If you raise taxes, you suck money back in and depress the economy and vice versa. Assuming that you can actually get the money, of course. >>
If you want less of something, you tax it.
If you want more of something, you don't tax it.
<< <i>Did we really have to go off the gold standard? >>
Yes. Foreign countries, seeing that we were weakening our currency, started exchanging it in massive quantities for our gold. By 1971 US gold inventory had been reduced by 50%. John Connally, Treasury secretary under president Richard Nixon, told foreign finance ministers that "the dollar was America's currency, but your problem". To solve the problem, France redeemed its dollar holdings in gold in early August 1971 by sending a French battleship to New York harbor to take delivery of of their new gold from the vault of the New York Federal Reserve Bank. Also in 1971, the British ambassador in Washington received instructions from London to go to the Treasury Department to request the conversion of $3 billion into gold and to have it moved from the United States Bullion Depository at Fort Knox to the underground vault of the New York Federal Reserve Bank.
But more importantly, in order to create new dollars from thin air, the dollar had to first be divorced from its gold backing. Since then, the US congress has been free to spend more money than it actually has on its books and to carry it as debt.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>
<< <i>wrong forum >>
Ahh, yes. Excuse me. My mistake. Shutting my mouth now. >>
If the world was going off the gold standard, the US kind of had to, too. It's impractical for any number of reasons.
Go over to the precious metals forum pcunix, this discussion is welcome and fun to have over there.
Use "search" and you'll find pages and pages of opinions, and new threads have legs, if they have a novel angle or witty reparte
Liberty: Parent of Science & Industry
Can't build anything new, innovation means nothing, no wealth can be created unless a certain amount of
gold can be located, dug out of the ground, made into ingots or coins, and usually buried again in an underground vault.
Rising population and rising productivity with a relatively fixed gold supply means gold based prices continually decline. Investments have negative real return, loans have to be repaid with increasingly scarce gold money. Doubled productivity is punished with a 50% decline in price.
The big industrial booms of the 1800s were fueled by an hugely increasing money supply from the gold and silver rushes.
In the US, under the gold standard:
Panic of 1819, a U.S. recession with bank failures; culmination of U.S.'s first boom-to-bust economic cycle
Panic of 1825, a pervasive British recession in which many banks failed, nearly including the Bank of England, affected the US
Panic of 1837, a U.S. recession with bank failures, followed by a 5-year depression
Panic of 1847
Panic of 1857, a U.S. recession with bank failures
Panic of 1866
Panic of 1873, a US recession with bank failures, followed by a four-year depression
Panic of 1884
Panic of 1890
Panic of 1893, a US recession with bank failures
Panic of 1907.
Many Americans died of starvation during these panics as the banks foreclosed on farms, evicted the farmers with
"the invisble hand" of the free market caring nothing about the impact on the food supply.
Since the creation of the Fed (not the "FED") in 1913 and enablement of a flexible money supply,
the only big depressions have been in 1929 and 2008, caused by lack of regulation of the stock market
and housing market respectively.
Learn history and get some education. And not from wingnut websites, talk radio hucksters, "end of America" videos, cartoons where
the villians have big noses and wear yarmulkes.
Numismatic dates: Notice the interesting happenings with decreased money supplies
1857 Panic - Foreign coins such as the 8 reales, which circulated freely as money, were demonitized.
1873 Panic - 2 cents, 3 cents silver, half dime, silver dollars discontinued
1878 - Panic ends with Bland Act and large mintages of Morgan dollars
1890 Panic - Production of silver dollars reduced
1893 ever bigger panic - Bland Act repealed and Morgan dollar production slows to a trickle because "the last thing you need do
in a depression is have the government increase the money supply"
1896 - William Jennings Bryan speech (Democratic presidential candidate)
There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.
You come to us and tell us that the great cities are in favor of the gold standard. I tell you that the great cities rest upon these broad and fertile prairies. Burn down your cities and leave our farms, and your cities will spring up again as if by magic. But destroy our farms and the grass will grow in the streets of every city in the country.
<< <i>
Learn history and get some education. And not from wingnut websites, talk radio hucksters, "end of America" videos, cartoons where
the villians have big noses and wear yarmulkes. >>
He didn't read the disclaimer :-)
Please read my disclaimer again before you bite my head off and if that doesn't work, happy chewing!
I will try an not bite but why do you (and so many others) think that raising taxes on the "fat cats" is an action that has no economic negatives (assuming you ignore the morality of the issue). We seem to forget so often that the economy is a dynamic world that responds to many forces and sometimes the results that follow a certain policy are quite unexpected in a negative way due to a lack of understanding of human behavior.
<< <i>I also understand that floating currencies can buffer economic crashes. Putting aside what happened to my retirement saving in 2001 and everything else that happened since we abandoned gold , couldn't just as good (and maybe better) results have come from raising and lowering taxes?
Please read my disclaimer again before you bite my head off and if that doesn't work, happy chewing!
I will try an not bite but why do you (and so many others) think that raising taxes on the "fat cats" is an action that has no economic negatives (assuming you ignore the morality of the issue). We seem to forget so often that the economy is a dynamic world that responds to many forces and sometimes the results that follow a certain policy are quite unexpected in a negative way due to a lack of understanding of human behavior. >>
This assessment is absolutely correct.
You may say that it is good to not be restricted by gold in an economy, but now we have immeasurable debt and rampant inflation along with an out of control government that is in it only for themselves. Don't tell me inflation isn't rampant, we are just lucky energy is eating up many of the extra dollars out there as energy prices shoot the moon.
Would rather be on a gold standard and keep the government in check.
BHNC member # 184!
http://www.busthalfaddict.com
<< <i>wrong forum >>
I disagree, going off the gold standard forever changed our US Coins....
Coin Club Benefit auctions ..... View the Lots
<< <i>Yes.
Can't build anything new, innovation means nothing, no wealth can be created unless a certain amount of
gold can be located, dug out of the ground, made into ingots or coins, and usually buried again in an underground vault.
Rising population and rising productivity with a relatively fixed gold supply means gold based prices continually decline. Investments have negative real return, loans have to be repaid with increasingly scarce gold money. Doubled productivity is punished with a 50% decline in price.
The big industrial booms of the 1800s were fueled by an hugely increasing money supply from the gold and silver rushes.
In the US, under the gold standard:
Panic of 1819, a U.S. recession with bank failures; culmination of U.S.'s first boom-to-bust economic cycle
Panic of 1825, a pervasive British recession in which many banks failed, nearly including the Bank of England, affected the US
Panic of 1837, a U.S. recession with bank failures, followed by a 5-year depression
Panic of 1847
Panic of 1857, a U.S. recession with bank failures
Panic of 1866
Panic of 1873, a US recession with bank failures, followed by a four-year depression
Panic of 1884
Panic of 1890
Panic of 1893, a US recession with bank failures
Panic of 1907.
Many Americans died of starvation during these panics as the banks foreclosed on farms, evicted the farmers with
"the invisble hand" of the free market caring nothing about the impact on the food supply.
Since the creation of the Fed (not the "FED") in 1913 and enablement of a flexible money supply,
the only big depressions have been in 1929 and 2008, caused by lack of regulation of the stock market
and housing market respectively.
Learn history and get some education. And not from wingnut websites, talk radio hucksters, "end of America" videos, cartoons where
the villians have big noses and wear yarmulkes. >>
In summary, yes. You need a flexible money supply to create unlimited and irresponsible debt. Note that banks survive and bankers profit from both personal and soverign debt. Also note that the two depressions appeared after the creation of the privately owned FED Reserve Bank (Fed is your government) and that creation of the FED has not eliminated economic recessions. Easy money policy by the FED enabled the causes of the depressions. Economic expansion/growth is only limited by gold backed money when the value of a fixed gold supply remains at a fixed price and is not allowed to increase in value. While i agree with those that say a gold standard will not solve our current problems, it appears that Frank and I are clearly on opposite sides of the FED coin. I respect his right to his opinion as I hope he does mine.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>
<< <i>I believe the old standard was that a Double eagle could buy one good quality men's suit. >>
Still true today, I think although I haven't bought a suit since 1985
But yeah: I just checked gold prices around that time and that's about what I paid. >>
Yeah, but what about the 2-fer sale at Kuppenheimers?
Source www.financialphysics.net
the villians have big noses and wear yarmulkes. >>
Yes, there are a lot of wingnuts out their but realize that they are not on just one side of the political spectrum. Sometimes they reside at what would seem very respectable outlets and institutions. With that in mind go for it.
the gold value of the dollar was worth more than the dollar and foreigners (as pointed out already)
were exchanging dollars for our gold.
Rather than devalue the dollar, it made more sense to simply stop the fixed exchange rate.
This also was a step in the direction of allowing Americans to own gold at the end of 1974.
<< <i>
<< <i>Did we really have to go off the gold standard? >>
Yes. Foreign countries, seeing that we were weakening our currency, started exchanging it in massive quantities for our gold. By 1971 US gold inventory had been reduced by 50%. John Connally, Treasury secretary under president Richard Nixon, told foreign finance ministers that "the dollar was America's currency, but your problem". To solve the problem, France redeemed its dollar holdings in gold in early August 1971 by sending a French battleship to New York harbor to take delivery of of their new gold from the vault of the New York Federal Reserve Bank. Also in 1971, the British ambassador in Washington received instructions from London to go to the Treasury Department to request the conversion of $3 billion into gold and to have it moved from the United States Bullion Depository at Fort Knox to the underground vault of the New York Federal Reserve Bank.
>>
The above is exactly what happened. The U.S. was financing the war in Vietnam and the Great Society programs by printing money. I was a university student studying economics at the time.
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>When claims are made that the dollar from 1913 is worth 2 cents today, that's a dollar sitting around 100 years doing nothing! Compare a dollar INVESTED for 100 years.
Source www.financialphysics.net >>
Frank, great returns for the limited number who invested. Unfortunately this chart affected all Americans
including those who invested. Unfortunately for every oz of good found in inflation there are a few pounds of bad:
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>Had we remained on the Gold Standard we would still be in the Great Depression -- only probably an even worse Great Depression. >>
Why is that?
Are you saying WWII would not have happened had we stayed on the gold standard?
Tying a nation's money supply to the quantity of gold and any other metal or commodity that it has on hand is archaic and silly. A nation's money supply needs to grow with the size of its economy. If that does not happen, economic activity will be stifled, and the odds of an economic slow are heightened.
You can argue about the Federal Reserve Bank's past policies, which have sometimes been the cause of problems. But concept of monetary flexibility and not arbitrary limits, like the gold standard, is a reasonable and rational approach. The only argument for that gold standard is that it limits the money supply, but the merits of can cut both ways and choking the economy with a shortage of currency is not an attractive option.
<< <i>The short answer is, "Yes."
Tying a nation's money supply to the quantity of gold and any other metal or commodity that it has on hand is archaic and silly. A nation's money supply needs to grow with the size of its economy. If that does not happen, economic activity will be stifled, and the odds of an economic slow are heightened.
You can argue about the Federal Reserve Bank's past policies, which have sometimes been the cause of problems. But concept of monetary flexibility and not arbitrary limits, like the gold standard, is a reasonable and rational approach. The only argument for that gold standard is that it limits the money supply, but the merits of can cut both ways and choking the economy with a shortage of currency is not an attractive option. >>
A gold standard doesn't say anything about the amount of money in circulation. The money supply isn't tied to the amount of physical gold that exists. Money in circulation was never tied to the amount of physical gold. The pace of discovery of new gold never acted as a limit on anything.
increasing money supply doesn't increase economic activity. QE QE2 QE3 QEinfinity ????? the fed has quadrupled its balance sheet and our economy did what?
Edited to add . Do people in this thread think that a gold standard prevents money being printed from thin air? It doesn't do that at all. The printed money just has to be freely convertible to gold . QE 1 would have worked under a gold standard if people believed it was needed.
increasing money supply doesn't increase economic activity. QE QE2 QE3 QEinfinity ????? the fed has quadrupled its balance sheet and our economy did what? >>
I have a limited understanding of money but have an interest in how it works. It would seem that the quantity of currency would not necessarily be limited by the quantity of gold backing it as long as the ratio of gold to dollar is not fixed but floating like it was another currency. If this was done though I suppose the price of gold would eventually skyrocket against the dollar as we create more money supply. Observing this openly might be too embarrassing to politicians though but gold coin collectors might not mind too much.
Come to think of it in a sense this may be close to what we have now only the market determines what the ratio is instead of some bean counter and the market can be artificially manipulated to some extent.
<< <i>Can't build anything new, innovation means nothing, no wealth can be created unless a certain amount of
gold can be located, dug out of the ground, made into ingots or coins, and usually buried again in an underground vault. >>
Gold can be considered both money and wealth. Wealth can be created without getting more gold. If I make myself a nice handmade wooden desk, I have increased my wealth without increasing my gold. There are certainly still concerns about the flexibility of the money supply, but there is not a completely rigid relationship between physical gold and wealth.
And while I'm sympathetic to gold standard arguments, I think the realities of working in a global economy make it very, very difficult.
<< <i>
<< <i>
<< <i>Did we really have to go off the gold standard? >>
Yes. Foreign countries, seeing that we were weakening our currency, started exchanging it in massive quantities for our gold. By 1971 US gold inventory had been reduced by 50%. John Connally, Treasury secretary under president Richard Nixon, told foreign finance ministers that "the dollar was America's currency, but your problem". To solve the problem, France redeemed its dollar holdings in gold in early August 1971 by sending a French battleship to New York harbor to take delivery of of their new gold from the vault of the New York Federal Reserve Bank. Also in 1971, the British ambassador in Washington received instructions from London to go to the Treasury Department to request the conversion of $3 billion into gold and to have it moved from the United States Bullion Depository at Fort Knox to the underground vault of the New York Federal Reserve Bank.
>>
The above is exactly what happened. The U.S. was financing the war in Vietnam and the Great Society programs by printing money. I was a university student studying economics at the time. >>
Lyndon Johnson financed the Vietnam War with a 10% surtax on top of regular income tax. Nixon repealed it, but war spending
continued escalating. Within 3 years, Nixon devalued the dollar twice, suspended convertability into gold, then tried to hide the
results by issuing an executive order freezing all wages and prices.
Video
<< <i>A gold standard doesn't say anything about the amount of money in circulation. The money supply isn't tied to the amount of physical gold that exists. Money in circulation was never tied to the amount of physical gold. The pace of discovery of new gold never acted as a limit on anything.
increasing money supply doesn't increase economic activity. QE QE2 QE3 QEinfinity ????? the fed has quadrupled its balance sheet and our economy did what? >>
I have a limited understanding of money but have an interest in how it works. It would seem that the quantity of currency would not necessarily be limited by the quantity of gold backing it as long as the ratio of gold to dollar is not fixed but floating like it was another currency. If this was done though I suppose the price of gold would eventually skyrocket against the dollar as we create more money supply. Observing this openly might be too embarrassing to politicians though but gold coin collectors might not mind too much. >>
The value of a dollar is set equal to a set amount of gold. No explicit percentage of gold backing is implied by a gold standard. The dollar has to be redeemable on demand at that set amount. Print as many dollars as you want it's all good as long as they circulate and everyone is happy with them.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
<< <i>
A gold standard doesn't say anything about the amount of money in circulation. The money supply isn't tied to the amount of physical gold that exists. Money in circulation was never tied to the amount of physical gold. Do people in this thread think that a gold standard prevents money being printed from thin air? It doesn't do that at all. The printed money just has to be freely convertible to gold . . No explicit percentage of gold backing is implied by a gold standard. The dollar has to be redeemable on demand at that set amount. Print as many dollars as you want it's all good >>
Sorry, but it doesn't work that way.
Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves.
Under the gold standard, governments that print too much paper money risk runs on their gold reserves. Runs occur as holders of the paper seek to convert to gold before the vaults are empty. A run on the dollar is what happened in the late 1960s, which culminated in President Richard Nixon closing the gold window in 1971.
“Closing the gold window” is a euphemism for the U.S. defaulting on its promise to other countries to redeem dollars for gold. As an alternative, Nixon could have devalued the dollar and continued to redeem. In effect, he chose a one hundred percent devaluation, a de facto default on the promise to redeem.
- See more at: http://www.cmi-gold-silver.com/article/gold-standard-inflation-fiat-money/
<< <i>Yes. >>
Beat me to it!
EDIT: Bill Jones summed it up nicely.
<< <i>Don't we not already have a defacto gold standard if we can exchange dollars for gold bullion through the U S Mint? As long as the Mint takes our dollars we can exchange all we want. What I think we cannot do is limit the amount of money supply to a certain amount of stock at Ft Knox. >>
Imagine if people started stating prices and accepting Eagles, gold and silver.. as some do with those stupid Bitcoins now. If enough people started doing it, it might drive out all the "real" money :-)
<< <i>
<< <i>Don't we not already have a defacto gold standard if we can exchange dollars for gold bullion through the U S Mint? As long as the Mint takes our dollars we can exchange all we want. What I think we cannot do is limit the amount of money supply to a certain amount of stock at Ft Knox. >>
Imagine if people started stating prices and accepting Eagles, gold and silver.. as some do with those stupid Bitcoins now. If enough people started doing it, it might drive out all the "real" money :-) >>
Problem is,I suppose, that everyone would have to check with the latest market price of the coin to know how much to ask. Also, we might be creating what some may call "pieces of eagles", the new preferred treasure of pirates.
<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>magine if people started stating prices and accepting Eagles, gold and silver.. as some do with those stupid Bitcoins now. If enough people started doing it, it might drive out all the "real" money :-) >>
That would be extremely inefficient. What if I want to buy a candy bar does that mean I have to lug around a bunch on 1 gram silver bars and a scale whenever I want to buy low cost things. It's fine with me to save in gold and silver, but for circulation you need paper money. In the internet age you don't even need paper money anymore.
<< <i>
<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. >>
That seems workable. I suppose some measures would have to be taken to prevent foreign raiders.
<< <i>
<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt. >>
This is why I own gold. The temptation for governments to create too many dollars in order to paper over our economic problems is too great. There is nobody left in government to make the hard choices that include reigning in huge deficits at the risk of alienating certain groups of voters. If you cut programs you piss off one group of voters. If you raise taxes you piss off another group. So the only politically palatable option is to print, then it becomes the next guy's problem.
<< <i>
<< <i>magine if people started stating prices and accepting Eagles, gold and silver.. as some do with those stupid Bitcoins now. If enough people started doing it, it might drive out all the "real" money :-) >>
That would be extremely inefficient. What if I want to buy a candy bar does that mean I have to lug around a bunch on 1 gram silver bars and a scale whenever I want to buy low cost things. It's fine with me to save in gold and silver, but for circulation you need paper money. In the internet age you don't even need paper money anymore. >>
But it's so much prettier
<< <i>
<< <i>
<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt. >>
This is why I own gold. The temptation for governments to create too many dollars in order to paper over our economic problems is too great. There is nobody left in government to make the hard choices that include reigning in huge deficits at the risk of alienating certain groups of voters. If you cut programs you piss off one group of voters. If you raise taxes you piss off another group. So the only politically palatable option is to print, then it becomes the next guy's problem. >>
The 1% pays 40% of our taxes now and most of them pay less than 20% tax rate. Double their rate and we could pay of the deficit in a decade or two. Our problem isn't spending on programs, it's taxing.
<< <i>
<< <i>
<< <i>
<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt. >>
This is why I own gold. The temptation for governments to create too many dollars in order to paper over our economic problems is too great. There is nobody left in government to make the hard choices that include reigning in huge deficits at the risk of alienating certain groups of voters. If you cut programs you piss off one group of voters. If you raise taxes you piss off another group. So the only politically palatable option is to print, then it becomes the next guy's problem. >>
The 1% pays 40% of our taxes now and most of them pay less than 20% tax rate. Double their rate and we could pay of the deficit in a decade or two. Our problem isn't spending on programs, it's taxing. >>
Sure. You could do that. But when you double the tax rate on people who are the top 1%, do you think they are going to stand idly by and accept that? Or, do you think that, because they have the resources to do so, they might flee the country taking their wealth along with them?
How many people are pulling the cart vs. how many people are in the cart?
<< <i>The 1% pays 40% of our taxes now and most of them pay less than 20% tax rate. Double their rate and we could pay of the deficit in a decade or two. Our problem isn't spending on programs, it's taxing. >>
About 50% of the country thinks like you and the other 50% thinks cutting taxes and cutting spending is the answer. So as I said before the printing will continue until public opinion tips in one direction or the other. How will you know when that happens? When one party controls the White House and veto and filibuster proof majorities in both houses of Congress. Until then expect more of the same.
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<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt. >>
This is why I own gold. The temptation for governments to create too many dollars in order to paper over our economic problems is too great. There is nobody left in government to make the hard choices that include reigning in huge deficits at the risk of alienating certain groups of voters. If you cut programs you piss off one group of voters. If you raise taxes you piss off another group. So the only politically palatable option is to print, then it becomes the next guy's problem. >>
The 1% pays 40% of our taxes now and most of them pay less than 20% tax rate. Double their rate and we could pay of the deficit in a decade or two. Our problem isn't spending on programs, it's taxing. >>
Sure. You could do that. But when you double the tax rate on people who are the top 1%, do you think they are going to stand idly by and accept that? Or, do you think that, because they have the resources to do so, they might flee the country taking their wealth along with them?
How many people are pulling the cart vs. how many people are in the cart? >>
That's nonsense. They threaten, but they wouldn't.
As to who's really pulling, it's the bottom, not the top. They just own the carts.
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<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt. >>
This is why I own gold. The temptation for governments to create too many dollars in order to paper over our economic problems is too great. There is nobody left in government to make the hard choices that include reigning in huge deficits at the risk of alienating certain groups of voters. If you cut programs you piss off one group of voters. If you raise taxes you piss off another group. So the only politically palatable option is to print, then it becomes the next guy's problem. >>
The 1% pays 40% of our taxes now and most of them pay less than 20% tax rate. Double their rate and we could pay of the deficit in a decade or two. Our problem isn't spending on programs, it's taxing. >>
Sure. You could do that. But when you double the tax rate on people who are the top 1%, do you think they are going to stand idly by and accept that? Or, do you think that, because they have the resources to do so, they might flee the country taking their wealth along with them?
How many people are pulling the cart vs. how many people are in the cart? >>
That's nonsense. They threaten, but they wouldn't.
As to who's really pulling, it's the bottom, not the top. They just own the carts. >>
uh huh.
OK then.