Options
Simple Poll: should the US return to the gold standard?
rec78
Posts: 5,949 ✭✭✭✭✭
Hello- should the US return to the gold or silver standard to stablize the currency or do you think that the current print fiat money as needed system will be adequate for long term? Or do you feel that perhaps some sort of other modified gold or even other stabilizing system could be established? Please feel free to comment-any and all comments welcomed. Thanks, Bob
0
Comments
Notice how things went to hell and a hand basket when they went off the gold/silver standard.
It was print as much money as there are trees and ink..LOL
It's a shame whats going on, and a tragedy on what's going to happen in the not so far future.
Good Luck.
Wil
coinsarefun, marmac, LindeDad, andree, robkool, TwoSides2aCoin, waterzooey, agentjim007
All were A++++ Transactions- Thank you !
(no pun intended but it is a cool "spin" on the topic!) Realistically though, I say NO!
We are currently in a SITUATION where money isn't experiencing its' normal velocity. In fact, it's contracting quite rapidly. The more money printed by the central banks, the more money that is sucked into the black hole of derivatives.
The combined world governments have made it CRYSTAL CLEAR they will print however much “money” is necessary to replenish the banking and currency exchange system. In effect, we will call upon our old nemesis, inflation, to be our savior.
When the full realization of this, and its impact, is realized, there will be a run on hard assets (GOLD) like has never been experienced in centuries!
My Friends, as much as I love these 2006-2008 W plats, I must part ways with them to buy the only currency that will maintain it's value in the future (GOLD).
The last time there was a serious monetary crises, GOLD went from $35 an ounce in 1972 to over $650 in 1980. That's a 20x increase.
Our Monetary Scare today puts the prior one to shame. I was there in 1972-1980..there were never any mentions of DEPRESSION....and that D word is often in the news today.
A 20x increase from today's price puts GOLD at $18,000 an ounce! Yes, the number seems huge. But the percentage increase is no different than the increase from $35 to $650 in the 1970s. IT HAPPENED. IT WILL HAPPEN AGAIN!
Given the unlimited printing of paper money currently happening worldwide, it's inevitable.
Ten years from now, a loaf of bread will cost $15. A gallon of milk will cost $35. Delmonico stakes will be $100 per pound at the butcher. A new car will be $110,000 (a cheap one, from Indonesia).
And your gold will maintain its purchasing power.
FloridaBill
"A dog breaks your heart only one time and that is when they pass on". Unknown
"Seu cabra da peste,
"Sou Mangueira......."
It would have been better if they re-valued it back then instead of dropping it completely but to go back now is senseless.
FloridaBill
The fiat system may not be the best, but free floating currency does work. The dollar has been punished in the last decade due to the lack of fiscal discipline on the US. The recent uptick in the dollar (since the summer) reflects that for all our problems, the US is still a safe long term bet.
BTW, anyone notice that the gold standard was one of the prime reasons for the length and severity of the Depression? Yeah, lets go back to that idea. Oh, and while we are at it, lets provide an even bigger incentive for people to rape the environment mining gold.
This will never happen on so many, many different levels. Instead of hoarding hard assets now, why not stockpile guns and freeze-dried food in your bunker? Money better spent.
merse
<< <i>BTW, anyone notice that the gold standard was one of the prime reasons for the length and severity of the Depression? Yeah, lets go back to that idea. Oh, and while we are at it, lets provide an even bigger incentive for people to rape the environment mining gold. >>
The gold bugs somehow seem to overlook this.
Government redistribution of wealth collapses once a parasitic government sucks the last drop of blood from the wealth producing hosts. We have been sucked dry a long time ago and now they are working on future generations.
The longer you delay the adjustment back to capitalism (ie honest money, ie gold standard) the worse it will be because more and more of the economy will be geared toward useless activities and socialism instead of manufacturing which is the ultimate producer of wealth in a society. Yes that is correct I do not believe you can have capitalism for long without a limited resource with which to trade (ie gold, silver, platinum, etc...). That limited resource is your way of storing your labor for retirement and other expenses.
The statement that we cannot have a gold standard because there is not enough gold is patently false and is a red herring put forth by the banking and government to support their perpetual theft of your savings and labor.
We would just need to revalue gold or at a much higher rate to cover the extra money created to maybe $8000 / ounce or so.
As far as "protecting the environment", there has been far greater destruction to the environment due to the extra houses, cars, furniture, etc that is being produced by having unlimited credit/debt and a system of shoving our lifestyle debt obligations onto 4-5 future generations.
As I said before, this is not sustainable and there will be a hard adjustment back to reality.
The gold standard is recipe for recessions and depressions. All the gold standard does it limit the amount of money that can be in circulation based upon a nation’s stock of a precious metal. That can be a good thing or a bad thing.
If the money supply is too small, it will inhibit the growth of the economy. If it is too large it can cause inflation. Gold standard advocates seem to think that the gold standard will automatically set the money supply at the right level. There is no law in economics that supports that assumption. Our economy should not be put in a straightjacket based upon the supply of a commodity.
Sad to say, but returning to the gold standard would be impossible. To cover the US economy/debt alone, gold would need to jump to $6,600/ounce...that was according to a discussion in Barrons just last week.
However, isn't the Swiss franc still partially backed by gold?
And don't get me wrong, I'm a strong money guy who also finds Ron Paul entertaining...but I don't think this is a panacea for all that ills us (or the world) economically!
investments from a coin collecting bulletin board
thanks.
I love discussing the gold standard issue...so I'll get back up on my soapbox. I also work for a large engineering infrastructure company...so I can speak to the following with some knowledge...
As an older industrialized nation, the U.S. absolutely needs deficit spending simply to maintain all of the physical infrastructure that's been built up over the past 100+ years...that's simply a real world truth. The only other option would be to raise taxes dramatically to balance the budget and maintain all of this accumulated infrastructure...unless bridges collapsing and tunnels and dams failing doesn't alarm anyone.
Of course, having a healthy growing economy addresses this issue to some extent...but only to a point. Since we also have an older population, with all of the associated medical and social security issues that entails, running deficits and inflating the dollar are simply a necessity...as is partial socialization of some functions, like in Europe in the 1960s and 1970s.
These are all simply matters driven primarily by demographics...and all the political wrangling on Earth can change these facts.
HOWEVER, there is one possible solution to what ills us...and that would be to allow an early 20th Century style influx of millions of young immigrants into the country who could push up productivity and simultaneously help pay off the debts of "older" Americans.
Not what some want to hear...but it's reality.
Whether it's $6,600/oz. or $35/oz. doesn't really matter. The actual physical constraint would be interesting to see. Of course, the mining industry would love it, and in a modern world there is a distinct value added - in modern high tech for instance - that don't relate directly to mining. So there would be economic dislocations under a gold standard, too.
Now, if the mines all ran out and the supply of gold were constant - that would make it interesting.
When the financial system is based upon Madoff-style promises that can evaporate in an instant, I'd say that ANY other physical medium of exchange is better, and that would include a gold standard system.
Having a regulated rate of inflation to (supposedly) coincide with the growth of the economy and to provide some liquidity is what we've grown up with. It seems to work most of the time, except when corrupt bankers and politicians dip their fingers into the till - which is "only" every possible chance they get!
It's not the concept of fiat currency that doesn't work. It's the jerks running the system. A physical gold coin is harder to manipulate, and its owner is less likely to be duped than a school teacher whose pension just evaporated overnight by 45% for no particular reason other than the powers-that-be-decided that there was a "crisis" that amazingly required the Fed to re-allocate money from the teacher, to the corrupt government politicians, and then to the greasy, money-grubbing fingers of the corrupt, greedy, incompetant bankers.
Not to be outdone in terms of bad government, the new administration has decided that "change" will consist of making a tax cheat (who is astoundingly a protege' of the previous crook-in-charge and architect of the current banking giveaway) to become the new tax guy, in charge of making sure that YOU don't cheat on your taxes. No filibuster - nothing.
The Who said it best, "meet the new boss, same as the old boss - we won't get fooled again........"
I knew it would happen.
<< <i>there is not enough gold >>
<< <i>
<< <i>there is not enough gold >>
Yes, how can they?
There's not enough gold in the world!!
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>Too much of the gold and silver would leave the country if you could demand it from a piece of paper like in the past. Think of the effects it would have on the US if all the money owed to other nations was paid up in gold and silver. We'd be left holding stacks of worthless paper and they'd be driving up the price of the precious metal. Not good econimics at all. >>
Stacks of worthless paper, this can and most likely will happen regardless if the money is backed by some type of pm or not.
I mean, the price of things would have to be altered, like a car wouldn't cost 30K anymore, it would be reduced to work with the new value of the dollar.
Accountants are running out of columns to put all the inflated numbers. It cost more in paper to put all those numbers on the page whether manual or computerized. More and more accountants throw up their hands and retire!
Seriously, you cannot have a gold standard without also adding silver and possibly energy to the equation.
While the silver and the gold interest fought for centuries over whose system should prevail, the reality is that their mutual co-existence in fact, helped each other.
The gold handled the large currency; the silver, the small currency and the pocket change. It was an uneasy truce, but it did work.
Interesting how gold was blamed for the Great Depression, yet after it was outlawed in 1933-1934, the economy went into another tailspin in 1937. Only WWII and the stimulus effect of the spending pulled us out of the depression.
But wait a minute, silver continued to do the hard dirty work throughout the Great Depression in small change and small currency. Silver certificates. Fully convertible until 1968!
We must return to a system in which our currency is backed at least 50% by something tangible other than a promise to pay with more promises to pay which was based our ability to collect tax revenues (US gov't bonds). This 50% backing was the original concept of fractional reserve banking which has morphed into unrecognizable fractional reserve banking of 25%, then 20% then 15% then 10% then nothing at all.
Only gold (and silver) are small enough to be stored properly and compactly to back the currency. It should not be redeemable at this time since there could be a "run" on the gold. But backing it up with 50% fractional reserve would at least put a damper on government runaway spending and printing money without at least a 50% backing.
It needs to be done in phases. The US government needs to embark on a slow program of strengthening or currency by once again backing it up. How? It has to be done slowly. Go back to the original concept of fractional reserve which can be as high as 50% (you do not need 100%) backing of all currency 2% of all currency each year to take a total of 25 years to get to the 50% (not more per year to discourage speculation) must be backed with new purchases for the new strategic precious metal reserves. If the Us Treasury does not have the will to do it then the 50 governors of each sta te needs to go to the President and urge that it be done. Otherwise, the current currency will soon implode.
Secondly, all new money that is printed MUST be backed with 50% reserves. Gold or silver, possibly even oil. The US government has the strategic petroleum reserves. Use such reserves to back up the currency in an official way.
But is there enough time left?
Or are we going the way of Iceland sooner than we think? You can not blame gold or silver for their crisis over there. I am hearing that things are quite nasty there.
<< <i>It will never happen... it would turn the world economy into a disaster. Cheers, RickO >>
With all due respect, Rick... how does one make a disaster out of a disaster? I mean, it's already a disaster... how much worse could it get?
...oops... maybe I shouldn't ask such a question...
<< <i>Absolutely not!
The gold standard is recipe for recessions and depressions. All the gold standard does it limit the amount of money that can be in circulation based upon a nation’s stock of a precious metal. That can be a good thing or a bad thing.
If the money supply is too small, it will inhibit the growth of the economy. If it is too large it can cause inflation. Gold standard advocates seem to think that the gold standard will automatically set the money supply at the right level. There is no law in economics that supports that assumption. Our economy should not be put in a straightjacket based upon the supply of a commodity. >>
Exactly.
If the financial system collapses then we might need a gold standard
as an interim measure to restore confidence and get things going again
but gold makes a terrible standard for money in modern times.
Idealy a currency would be based on the GDP but we'd still need leaders
who can control their spending to their actual rate of taxation.
Consider that the US had 6 currency collapses between 1800 and 1920 while on a gold standard.
Based on the current poll results (No leading Yes) it is obvious that a lot of members do not understand the true meaning of backing the currency with gold.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
There's not enough gold and silver in existence to cover the amount of currency circulating.
Last I heard, there's about $600 or $700 billion dollars face value of all the current population.
The "good will" of the United States of America is what keeps the treasury afloat.
JT
I collect all 20th century series except gold including those series that ended there.
my early American coins & currency: -- http://yankeedoodlecoins.com/
<< <i>there is not enough gold >>
There is not enough gold.
1. Re evaluate gold, by Word Government agreement.
2. Back only a small percentage of each dollar printed.
Camelot
<< <i> Back only a small percentage of each dollar printed. >>
This is not a gold 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
the author states:
"And yet all the silver in the New World could not [...] save Spain from an inexorable economic
and imperial decline. Like King Midas, the Spanish monarchs of the 16th century [...] found
that an abundance of precious metal could be as much a curse as a blessing. The reason? They
dug up so much silver to pay for their wars of conquest that the metal itself dramatically
declined in value - that is to say, in its purchasing power with respect to other goods."
And later:
"There was in fact no reason other than historical happenstance that money was for so long
equated in the Western mind with metal."
Go back on the gold standard. Before long another Franklin Roosevelt will make it illegal for you to own gold and demand that you turn into the government at a depressed price. The government will get another windfall, and you will have paid another implicit income tax to the Federal Government.
History repeats itself for those who refuse learn something from it.