will the united states go back on the gold standard

CLASSICS · February 26, 2003 8:58AM

fiat funny money is all we have today. a piece of paper with numbers on it, backed by the word of the goverment. with the cost of everything today, and what it is costing the us taxpayers to be the worlds peace keepers, they keep printing paper, paper, and more paper, it cant go on for ever.........something has to give sooner or later, even greenspan has said the united states should once again go back on the gold standard.............would we be better off back on the gold standard, or just keep printing it up and lets all live the high life............your thoughts

dwood · February 26, 2003 8:59AM

Go back...but it will never happen.

paigowjohnny · February 26, 2003 9:03AM

You shall not crucify mankind on a cross of gold.

OneYearTypes · February 26, 2003 9:03AM

There's not enough gold to back all the 'government promises'. So we'll never be backed by it again, alas.

agfox · February 26, 2003 9:04AM

As we are now the government makes money everytime they make a coin that a collector keeps (such as the state quarters). Think it's 15 cents on a quarter that they make? Correct me there on the exact number. You ask them to stop making money? Heh. Funny.

BillJones · February 26, 2003 11:23AM

You shall not crucify mankind on a cross of gold.

I agree, but for different reasons than William Jennings Bryan.

The gold standard places an artificial ceiling on the money supply. The amount of money needed for the economy depends upon the size the economy, NOT on the amount of the gold that happens to be within your country's boarders.

Here's an interesting statistic. About 1% of the U.S. money supply is in coin form. Another 19% are in currency. The rest is in the form of bookkeeping entries on computers.

That may sound scary, but it really isn't. Gold does not preserve the value of a nation’s currency. If the gold that is in the coins is worth less than the face value of the pieces, it will circulate. If the gold is worth more than the face value of the coins or the currency that could be converted to gold, the money won’t circulate. History has shown this to be true.

The gold standard is an antiquated concept, and even during its “golden age” in the 1870s, it did work that well.

coinkat · February 26, 2003 11:26AM

no

coinkat · February 26, 2003 11:28AM

That was my shortest post ever... and that may not ever change.

coppercoins · February 26, 2003 11:32AM

The government would go broke trying to back their word with gold.

KlectorKid · February 26, 2003 11:36AM

KlectorKid · February 26, 2003 11:36AM

^ That was my shortest post.

coinkat · February 26, 2003 11:44AM

KK:

The compelling question here is... was it a post if nothing was written?

Twowood · February 26, 2003 11:48AM

It'll never happen. Twowood

Higashiyama · February 26, 2003 12:04PM

No, for many reasons, as BillJones has pointed out.

With respect to the US government keeping its promises -- the National debt is relatively low at present compared to many other times in US history. To the extent that anything in life is risk free, it is accurate to view US government bonds as risk free. The US government is in absolutely no danger of defaulting in its debt.

With regard to other (non-debt) obligations, there will likely need to be some compromise with respect to medicare. The pension portion of the social security program is in fairly good shape, in spite of dire predictions in the press. However, the US long term budget situation is manageable. (in contrast, perhaps, to that in Japan . . .)

michael · February 26, 2003 12:18PM

no ............................... never going to happen

sincerely michael

redhott · February 27, 2003 12:58PM

No, what would be the point, since public opinion polls have recently shown that many people already think the Sac dollar is, or contains, gold?

BillJones · February 27, 2003 1:15PM

“Some people think that the Sakie Dollar contains gold.”

To paraphrase Lincoln it shows that you can fool some of the people all of the time. After all, hasn't the govenment called it "The golden dollar?"

roadrunner · February 27, 2003 1:26PM

Looks like a great time to take the contrarian view with everyone so far opposed. I think the potential to go back on a gold standard is very real. If we continue to have major currency issues with our dollar price falling and forcing other nations to bail out of our dollars then we just may have to slow down the printing press and back our dollar with something tangible again. We have been off the full gold standard for many many decades. But in the 60's and 70's we backed a fraction of our currency with gold. Now we back 0%.

When we left the gold cover in 1974 we were backing something like 5% of our currency with gold bullion reserves. We still maintain something on the order of 1-5% of gold reserves compared to our currency. By maintaining some sort of control on the FED printing presses confidence overseas would improve in our dollar. While this may not be a big issue today.....let's see what happens in a few years from now if our dollar gets battered by other currencies. A return to a 3-6% gold cover on our currency would allow some much needed stability on our currency and give investors more faith in carrying US dollars. Since coming off it in 1974 we have experienced many new problems that did not exist before this. Going back on a gold cover might just improve things. Printing more money to pay off our debts with more devalued paper is not the answer to our current problems. Greenspan and Co. know this but until Congress figures it out nothing will change.

roadrunner

Aethelred · February 27, 2003 1:45PM

Vote McKinley

oreville · February 27, 2003 2:03PM

A vote for silver is a vote for Bryanarchy!!!

Keep in mind that the US has 600 million barrels of oil in their strategic reserves. They should have had more as they were buying at some very good prices. That is equal to 2.4 billion which has replaced some of the former silver reserves in valuation.

Too bad the US did not keep intact their supply of strategic gold and silver.

I predict that within 20 years the US will become a weakened #2 economic power behind that of China. Within 20 years China will be able to spend more on annual military outlays than the US. Within 30-40 years, China will possess absolute and vast military superiority over that of the US and the Britanization of the US will then be complete.

All of this will happen unless we wake up and fast.

Trime · February 27, 2003 10:43PM

Since you asked : My opinion is a confident No. That does not mean that the price of gold may not soar nor does it imply we know how to manage or debt, balance of payments, or be confident on the future course of the value of the dollar. This is one of the topics that always has polar views.

nwcs · February 27, 2003 10:54PM

It'll never happen. As a nation, we're so well trained that if the govt. ever put circulating silver back in, it'd get hoarded. If it was to ever back with gold, there will be those who find a way to extract the gold out of it. The only solution is moderation and fiscal responsibility, something this nation does not value.

keets · February 27, 2003 11:19PM

........and why not a one ounce silver $5 circulating coin to start with??

al h.

bulloncoins · February 27, 2003 11:35PM

No.

Our economy is no longer dependant on gold. When is the last time anyone saw the inside of Ft. Knox or Westpoint? There is nothing there.

Oil and energy are what the economies of the world are now based on. Until we develop a renewable source, this will not change......Just think where we would be without it, or what would happen to our economy overnight if the world cut us off.

DeepCoin · February 27, 2003 11:53PM

This topic tends to appear on a regular basis. The previous post regarding money supply versus the gold supply was right on target. The value of the dollar is related to our economy, and will never be related to how much of a mineral we have stored in a vault. The world and US economies require far more liquidity than could ever be established by using precious metals as a currency (or backing for a currency).

bulloncoins · February 27, 2003 11:58PM

I do love Keets idea of a circulating $5.00 peice.!

wayneme · February 28, 2003 12:03AM

[I predict that within 20 years the US will become a weakened #2 economic power behind that of China. Within 20 years China will be able to spend more on annual military outlays than the US. Within 30-40 years, China will possess absolute and vast military superiority over that of the US and the Britanization of the US will then be complete.]
have you looked at the goods your buying now . see where their made i think your time frame
on these events is way off i give it 5- 10 years tops
we'll never be back on the gold standard the powers to be would never stand for it

Bear · February 28, 2003 12:15AM

The idea of limiting the expansion of the money supply to unsupportable levels

makes the thought of backing even 5% of the supply with gold as a method to insure fiscal

dicipline tempting

However ,the national economy has grown to such an enormous level, I am not sure that even the

tens of billions of dollars worth of gold in Fort knox would be enough. Further in the world economy,

unless all major nations were on such a modified standard of dicipline , such a move might stiffle

world trade and remove the governments ability to respond to profound national and world crises.

We might just as well back our currency with jelly donuts. At least it will go down easier with

the general public.

Bustman · February 28, 2003 12:18AM

Will not happen.

keets · February 28, 2003 12:40AM

Further in the world economy, unless all major nations were on such a modified standard of dicipline, such a move might stiffle world trade and remove the governments ability to respond to profound national and world crises.

ah bear, what we need to do is to start demanding that our loyal trading partners, maybe we could start with the european union, pay us in a certain percentage of gold in further trade agreements. our job as world's policeman could be compensated for in gold bullion. the government has leverage if it chooses to use it. the trick is devising the plan before we were to implement any kind of a change. done in a correct and timely fashion it would behoove all third world economies and most legitimate governments to follow.

al h.

Bear · February 28, 2003 12:45AM

Keets, I like it, I like it.

ANACONDA · February 28, 2003 1:05AM

"ill the united states go back on the gold standard"

I seriously doubt it.

eagle7 · February 28, 2003 1:13AM

No because then it would be impossible to keep the rank and file buried under a mountain of debt!

BillJones · February 28, 2003 7:51AM

The Chinese economy will only surpass the U.S. economy if they scrap communism and all visages of their planned economy completely. Communism does not work. It cannot work efficiently, and it will never deliver the goods to the working classes that the communists promise. Karl Marx may have been a sociologist, but he didn’t know anything about economics.

The other side of this is what happens to the U.S. economy. If the liberals and socialists get what they want, government will take more in taxes and weigh down the economy with more regulations. If that happens we could shot ourselves in the foot.

Economic freedom = prosperity for more people.

Big government = a sluggish economy for everyone except those who hold elite posts in government

Whitewashqtr · February 28, 2003 7:56AM

NO!!

BillJones · February 28, 2003 8:04AM

Whitewashqtr

Would you care to elaborate, or is “NO!” the best you can do?

fishcooker · February 28, 2003 8:41AM

No. Value of money is psychological. We could decide that gold is not that valuable just the same as printed paper. So it makes no difference, unless you've already decided that gold is valuable.

I get paid with direct deposit, not paper money. I think those electrons are just as valuable as paper, but others don't.

Keyrock · February 28, 2003 8:53AM

no

BillJones · February 28, 2003 9:01AM

Money has a bit more value that just a psychological basis. It also has the backing of the legal system, which states that our currency satisfies debts both public and private within a court of law.

When you think about it, what really has value? Things that really have value are necessary to sustain life. These thinks include food, shelter and ability to protect one’s self from predators. Everything else takes us up Masloft’s hierarchy.

wayneme · February 28, 2003 9:23AM

[The Chinese economy will only surpass the U.S. economy if they scrap communism and all visages of their planned economy completely. Communism does not work. It cannot work efficiently, and it will never deliver the goods to the working classes that the communists promise. Karl Marx may have been a sociologist, but he didn’t know anything about economics. ]
under Hilter with no out side help Germany had the biggest inprovement in their economy know to man
from world war one to world war 2 now in china we are paying them with trade to keep control
their predicting a 20 year growth market

BillJones · February 28, 2003 9:39AM

Wayneme:

One of the fallacies of relying totally upon statistics to evaluate something is to measure growth by taking the worst case as a base from which to work to measure the improvement. In the 1920’s the German mark was worthless and the economy was in a shambles. Coming up from that was hardly the greatest of accomplishments. The same point has been made about the Russian economy after the communists took over.

I’ll concede that Hitler built the German economy into a formidable war machine, but think about the human costs of World War II.

wayneme · February 28, 2003 10:48AM

[I’ll concede that Hitler built the German economy into a formidable war machine, but think about the human costs of World War II.]
agreed !!!!! but the facts remain one mind control or party moves things along rapidly to a point
and look at the numbers in china turn something over when you buy it 80% chance it from china we were almost swamped by Japan in the 70's and 80's were on the same path
till the currencies rate changed by the IMF in 83 we are down a road we can not stop
and i wonder if a rate change later on won't start something we wouldn't want to see

BillJones · February 28, 2003 11:40AM

The Chinese economy is a dichotomy. Half of it practices controlled capitalism and is going strong and getting strong. The other half is in the communist doldrums with a mostly unhappy population that would like to emigrate to the capitalist side.

The Chinese government is sitting in the middle. If they let freedom and prosperity grow too much they could be out. If the communist side gets too unhappy they could have a revolution on their hands down the road. The Chinese government is in the same position that the slaveholders were in the antebellum South. In the words of Thomas Jefferson it is like “holding a wolf by the ears and being afraid to let go.”

Either way I have confidence that the U.S. will win because so long as our system allows innovators to develop new businesses and industries we will be able compete with anyone.

roadrunner · February 28, 2003 11:42AM

Putting gold back into circulation or allowing us to redeem our notes for Gold will not happen. But to link the FEDs ability to print money willy nilly with say a 3-5% gold cover would require them to aquire gold on the market prior to printing that money. This is not a system where gold backs the currency or redeems, only one that puts constraints on the FEDs unlimited resources to print money and ultimately devalue everything we own. So far the past few years they've printed money at an amazing rate in an attempt to keep our easy credit economy alive. They cannot keep doing it w/o severe consequences. When everyone agrees it cannot happen, that opens the door to the opposite view.

roadrunner

BillJones · February 28, 2003 11:50AM

Within recent memory (since the Jimmy Carter years) the money supply HAS NOT been an economic issue. I don't see any need to create any artificial barriers that limit the Fed Chairman’s desecration.

Alan Greenspan as done a masterful job of managing our monetary policy. He may be getting into dangerous political territory when he starts talking about the Cost of Living aspects of Social Security and our fiscal policy. Implying that the cost of living increases for Social Security need to be reduced is like hugging (not just touching) the third rail of politics.

Trime · March 1, 2003 12:09AM

Re: China
I have had the opportunity to travel to China repeatedly over the last 25 years. The Chinese economy is not similar to the Russian economy of the 60-80s (been there done that). Those of you who doubt the potential strength of the Chinese economy , visit Shanghai for a few days. You will be amazed. I saw recently over 50 high rise buildings being built on the same day. the city looks like a combination of NYC and Las Vegas (not that this is my taste) with tall buildings flashing lights. They are growing internally and externally. Check your labels on almost anything you have and then ask what is inside your computer etc. I have visited their technologic centers and I am very impressed. I could expand on this, but IMHO , this is a force to be acknowleged.

eminem · March 1, 2003 12:23AM

No to the gold standard.

Higashiyama · March 1, 2003 5:02AM

Trime -- I don't think anyone disagrees that China has made extraordinary economic progress over the past 25 years. (Deng Xiao Ping should certainly be viewed as one of the visionary world leaders of the 20th century). There are many plausible scenarios under which China becomes the leading economic power. (Sharing the world stage with the United States, which. barring global catastophe, will remain a vital and leading economic power)

However, in spite of the remarkable vitality of Eastern China, much of the country is still extremely poor, the disparity in wealth between the urban elite and others is huge, and it will require great political agility and wisdom to chart a course that continues the current tragectory of growth without social upheaval. It very well may happen, but it is far from assured.

Even assuming that China can avoid debilitating social upheaval, I agree with BillJones comments. When a country is in the catch up phase of economic growth, economic growth and authoritarian government are compatible. (In fact, you could argue that the type of progress that China has made would be difficult without a relatively authoritarian regime) However, the creative growth that drives the U.S. economy is inseparable from the remarkable degree of freedom we enjoy in the United States.

China will also face a non-trivial demographic challenge in 30 years, as it evolves from a relatively youthful society to an aged society. By then technology (and learning from the experience they will have from Japan and the European countries) will probably allow this transition to go smoothly, but, China's aging demographics will be a source of social stress and will put a damper on economic growth.

Trime · March 1, 2003 5:12AM

Higashiyama,
You are correct with every point you made. I know quite a bit about demographics and the aging population is a major problem in China where the projections are for >20% over 65 years by 2050 (Compares to a similar figure now in Japan; see WSJ a few weeks ago). The situation is also quite challenging in many "western countries". Oh well , this is the coin forum and I got a bit off topic.
Let us say that "it is difficult to make predictions particularly about the future". lol

Askari · March 1, 2003 5:46AM

That "demographic problem" China has is one faced by Europe, Russia, and the US as well. It will be interesting to see how this develops.

As for returning to the gold standard, I don't think so -- not short of a major global economic crash, which I don't really foresee. Even if it were the absolute best thing for our -- and the world's -- economy, the politics of power are dead set against it. In democratic countries in particular, parties fall from influence when the economy tanks and being able to print money is seen as the primary and best way of keeping it "lubricated." Moreso, it minimizes the constraints on spending as they will (read "to wield their power").

wayneme · March 1, 2003 6:05AM

[However, in spite of the remarkable vitality of Eastern China, much of the country is still extremely poor, the disparity in wealth between the urban elite and others is huge, and it will require great political agility and wisdom to chart a course that continues the current tragectory of growth without social upheaval. It very well may happen, but it is far from assured. ]
have you been to new york lately talk about disparity in wealth

will the united states go back on the gold standard

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