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About FDR:
I agree that FDR was socialist scum, but when it came to taking us off the 'gold standard', he had no choice. The Great Depression was deepening and the US gold reserves were disappearing at an alarming rate as people redeemed their currency for precious metals. There was no where near enough bullion of any kind in America's reserves to cover the amount of currency issued; there never has been in the entire history of our nation, not even close to that amount.
If FDR has not acted, the bullion reserves would have been exausted in a very short time. Once everyone discovered that there was nothing left to back the supposedly gold-backed currency, there would be a panic and hyperinflation, with the currency becoming literally worthless overnight. I'd like to hear the gold cultists explain what FDR could have done instead.
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About the 'real value' of gold:
People pooh-pooh the market value of gold and talk about the 'real value'. They are right in that the market value is heavily manipulated, but they are wrong in that the 'real value' is not what they think. The goal in using the term 'real value' is to project the false impression that gold's value is immutable. They point to the history of our country, and say that supply changes (like the California gold rush) didn't drastically change the value of gold, which is true. But that doesn't take into account new events that have never happened before, like a technological breakthrough in gold extraction, or a really massive new source, like asteroid mining.
The basic point is this. The true value of gold is what other people are will to trade you for it. It's just that simple. The only reason that gold has remained so valuable over the history of our country is that the general population believed it was scarce, thus believed it was valuable. If news gets out that new technology can extract/mine/transmute gold cheaply in very large quantities, that general perception of value, which is totally predicated on gold's scarcity, will disappear in a flash, and gold's true value will evaporate on the spot. No one can change that fact.
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About the changeover from floating currency to specie-backed currency:
No one has yet explained how this can be accomplished without crashing the economy. The argument seems to be, "gold will solve all our problems, and since the fiat currency will crash anyways, we have nothing to lose, so let's go for it!" First, our fiat currency has survived for 70 years now without becoming worthless, in spite of constant predictions of imminenet currency collapse since day one. Second, the benifits of a specie-backed currency have been largely debunked here. Third, the dangers of a specie-backed currency remain unanswered by the gold cultists. I can't see the justification for destroying our economy with such a changeover for no real gain.
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I would love for someone to show me a realistic option to our fiat currency with a realistic plan to get there, but I have yet to hear either after dozens of gold-standard debates. The privatization of currency has some interesting possibilities, although I think those that actually believe that such a currency couldn't be manipulated by banksters or the government are being quite naive. Such sleazebags always find a way to manipulate currencies, and our gold-standard currency was certainly heavily manipulated by currency speculators throught it's history.
Just to stir up the debate, I will propose an idea I came up with myself. Suppose we used land titles to back currency. The fedgov could start selling the huge amount of public lands to private currency issuers (PCIs). The PCIs would hold the land, and have the right to lease use of it. They would be responsible for maintaining the land. The PCIs would then issue currency based on the value of the basic land title (not on the structures on the land). They would pay these 'land notes' to the fedgov, who would use them to pay the national debt and for government services, thus putting this new currency into circulation painlessly. The trick would be the appraisal of the land, to get an impartial board to decide the value of each title, and how much currency could be issued against it. This is an idea I haven't heard elsewhere before.
The obvious advantage is that, with increasing populations, land is highly unlikely to lose any long-term value - ever. The two currencies, FRNs and land notes could coexist in the economy, making the currency transition gradual. The currency would become privatized, although the fedgov would likely grab an oversight role to stop the inevitable fraud. The drawback is potential inflation, as over the long term, land always increases in value due to the fixed supply.
Anyways, there's an alternative for all of you to think about. Perhaps you could come up with other better ways to ditch FRNs. The idea that fiat currency or specie-backed currency are the only possible options is false.
More accurately, he CONFISCATED gold at 1/20 ounce/$ and then redefined the $ as being only worth 1/35 ounce as soon as the confiscation was complete. "Taking us off the gold standard" is a euphemistic phraseology.
I'd like to hear the gold cultists explain what FDR could have done instead.
A primary tenet of free enterprise is that you have the right to compete, but not to suceed. Those who made bad decisions were supposed to suffer the consequences not get the government to act in a totalitarian manner to rescue them.
The basic point is this. The true value of gold is what other people are will to trade you for it.
Who's disagreeing with this?
Gold's true value will evaporate on the spot [if it no longer is scarce]. No one can change that fact.
Who disagrees with that? If it is not the most ideal long term store of liquidity, why is there a 25+ year inventory sitting in inert bars in vaults. What other commodidity even comes close? Name one other commodity (diamonds don't count because they lose their value when divided) that has even 2 years of production in inventory.
No one has yet explained how this can be accomplished without crashing the economy.
Will you favor it if someone can?
I would love for someone to show me a realistic option to our fiat currency with a realistic plan to get there, but I have yet to hear either after dozens of gold-standard debates.
You are not ready to hear how it can be done. You are not at all convinced it is a desireable goal.
our gold-standard currency was certainly heavily manipulated by currency speculators throught it's history.
Where can I learn more about such manipulation.
I don't think you're being completely honest with us here. FDR's pattern, not just when it came to monetary policy, but to all aspects of public affairs, was not to simply "minimize the damage", but to completely overhaul the pre-existing social order, using an emergency as his vehicle. There may have been plenty of temporary measures government could have instituted to alleviate the damage that government caused, but that's no reason for society to be run like a permanent emergency.
And again, you have yet to answer the point I (#43) and at least one other poster raised, that every charge of "instability" you can level against a gold-based system can be applied with even greater force against a fiat currency - unless of course you simply trust the government to do what's right.
And the value of our paper money would disappear overnight with a well placed meteor strike or nuclear attack. So the question is which has the greater chance of happening...an overnight miracle technology, or the wipe-out of our government. History shows that governments do get wiped out overnight every so often, but overnight miracle technologies have never occured. Technologies take years to develop. If Washington were wiped out and many citizens had personal caches of gold, our economy, and therefore our protection, has a chance of surviving through our state governments because the rest of the world would hold value for our gold...not so with a Washington-based fiat currency.