Skip to comments.Jim Rickards - Gold Standard Coming, Fedís Hoenig Correct (Bernanke gold standard trial balloon)
Posted on 01/06/2011 7:36:18 PM PST by dollarbull
Fed Governor Hoenig shocked many observers yesterday when he stated, The gold standard is a very legitimate monetary system...We're not going to have fewer crises necessarily. You will have a longer period of price stability or price level stability, but I don't know that you'll have lower unemployment, I don't know that you'll have fewer bank failures. King World News immediately interviewed Jim Rickards who has worked with both the Fed & US Treasury, and who also has a background in national defense as well as consulting with government directorates around the world.
(Excerpt) Read more at kingworldnews.com ...
You paperbugs are going to be screwed
okay I think I understand the arguments on both sides. The usual argument in favor of a fractional reserve system is there is not physically enough gold for it to be used as a means of exchange in the economy.
In early 1983, I wrote Senator Sam Nunn of Georgia
to ask about the redeemability of Federal Reserve
Notes. His reply arrived on March 11 and read (in
part) as posted below.
It would APPEAR that either:
1. Sam Nunn ACTUALLY gets it about what happens when man
(or certain men) play God with money;
2. Nunn DOESNT get it — and some staffer sent this out
without actually READING it or running it by the boss (in
which case said staffer now works for the DC Sanitation
3. None of the above. Because nearly every American is an
economic illiterate, what possible harm could it do to send it?
In which case, you economic illiterates who read this will mutter
So what? and flip back to MTV.
In any event, for the edification of you non-economic illiterates
out there, here it is.
Thank you for your letter requesting information on
redeemability of Federal Reserve Notes for lawful
money. I have enclosed information from the
Congressional Research Service that I hope will be of
The enclosure was 4 pages from something called
“The Gold Standard: Its history and record against
inflation. A Study prepared for the use of the
Subcommittee on Monetary and Fiscal Policy of the Joint
Economic Committee, Congress of The United States.” It
was printed September 18, 1981. I was sent only the
England and U.S. portions of the study. What they
revealed was most interesting. From the England study:
“England has had 350 years of experience with
various forms of the gold standard. She first went on
the gold coin standard, de facto, in 1717. This was
done by Sir Isaac Newton, then Master of the Mint (and we all know what a dumb ass HE was). It
was done by pricing gold at the mint more favorably,
relative to silver, than in the marketplace. An Act of
Parliament in 1816 gave formal recognition to this
‘new’ monetary standard that had been operational for a
century in promoting England to a world power.
“Between 1797 and 1821, England temporarily
suspended the gold standard because of the economic
disruptions of the Napoleonic Wars. With no gold
backing to the currency, the supply of money had no
discipline except that imposed by the Board of
Governors of the Bank of England (analogous to our Fed
The result was that wholesale commodity prices shot up
nearly 50% in 4 years-a momentous inflation.
The ‘Bullion Committee’ was formed by parliament
to investigate. Their findings read in part as follows:
‘The suspension of cash payments has had the
effect of committing into the hands of the Directors of
the Bank of England, to be exercised by their sole
discretion the immediate charge of supplying the
country with that quantity of circulating medium which
exactly proportioned to the wants and occasions of
the Public. In the judgment of the Committee, that is
a trust which it is unreasonable to expect that the
Directors of the Bank of England should ever be able to
discharge. The most detailed knowledge of the actual
trade of the Country, combined with the profound
Science in all principles of Money and circulation,
would not allow any man or set of men to adjust, and
keep always adjusted, the right proportion of
circulating medium in a country to the wants of trade.’
“Gold convertibility of the currency was resumed
in 1821. It is a matter of record that wholesale
prices came back down immediately to the level
preceding the hiatus in the gold standard.
“England was again off the gold standard between
1919 and 1925. When she resumed gold convertibility it
was on a gold bullion standard where she remained until
1931, when she went off the gold standard altogether in
the midst of the Great Depression.”
Under the United States, we find the following:
“The long period of the gold standard in the
United States was not an economic nirvana. The most
severe inflationary period reaching completion under
the gold standard was from 1897 to 1920. But from
trough to peak, the average annual compound rate
was 5.4%—mild by present experience. And most of this
occurred from 1914 to 1920 when the European war and
its aftermath bore so heavily on the domestic economy.
If we look at the period between 1897 and 1914, the
average annual rate of inflation was 2.6% — enviable
from the perspective of today.”
DICK BACHERT (circa 1993)
People look at the gold standard through rose colored glasses, forgetting about the miserable management of it all throughout the 1800s and into the 20th century.
It’s not that I’m for paper or gold. In reality, it doesn’t really matter what medium of exchange is used, but rather the government manipulating the supply of whatever that medium happens to be for all kinds of reasons that likely has nothing to do with what’s good for the average Joe.
What screws us over more than anything else is the government monopoly on money and unless or until that is removed, there is no escaping the screwing one way or the other.
Time to hide those krugerrands, kiddies.
So we've known this for the past 200 years but somehow we keep thinking we can avoid reality?
Coinage Act of 1792...
All you need to know...
there is not physically enough gold for it to be used as a means of exchange in the economy.<<<
HOW STUPD CAN U BE?????????????
I need you in my math class...it can be divided equally ...
If u have any questions after that...please respond
Some folks simply cannot resist playing god.
And, sadly, the rest of the folks, busy with their own lives and convinced that these brilliant folks have some special wisdom or knowledge, let ‘em!
Is it possible to have rational discussion on the subject without each side resorting to name calling? I didn’t say I was pro or anti-gold, just stated one of the arguments.
Fractional reserve banking is part of the problem; it’s basically a legalized form of counterfeiting. Neither the idea of basing money on gold nor the idea of fractional reserve banking should have survived past the middle ages. My own guess would be that the thing which saved both of them was the influx of gold from the New World, but those days are over. The gold standard was a major source of grief all through the 1800s and would be a disaster were it to be implemented now.
Volume???..in this day and age?...If u cant do the math i can
Now!...U may not like the answer...but that's your problem at that point....retreat and plan a new attack
Good post thanks!
“The usual argument in favor of a fractional reserve system is there is not physically enough gold for it to be used as a means of exchange in the economy”
Especially since the US has no gold.
I ain’t hidin’ nothin’. If they can get through my front door, they can confiscate it. They’re free to try.
Hate to change the subject, but we’re talking about spescultion, and I would like to ask the question if anyone has heard of, or have any thoughts on the Iraqi Dinar Investment.
Is it a scam? Legit, but high risk? etc.
Thanks for any responses.
I am sorry, but the US does not have a manufacturing base upon which to rest the value of our currency now, thanks to NAFTA and other free trade BS which has lead to our losing all that. So going back to SOME sort of hard monetary value upon which to back our currency is essential. If we intend to survive that is.