Posted on 02/15/2011 6:43:37 AM PST by SeekAndFind
Let’s dispel some confusion as to how the gold standard works in practice. Some still believe that it involves carrying around purses full of gold coins. That’s a funny misconception.
When my father, born in 1910, was a young man the circulating currency said “gold certificate.” He could walk into any bank with a $20 bill, tender that, and walk out with a $20 gold coin weighing just about an ounce. That’s a gold dollar. It was very rare that people would prefer a gold dollar to a gold certificate. A gold dollar was heavy and inconvenient. That said, your right to demand a gold dollar for your money kept the money honest, as good as gold.
There was a saying back then, “an honest day’s pay for an honest day’s work.” And it was nicely reinforced by honest money: the gold dollar.
When I, born in 1952, was a young man the dollar bill said “silver certificate.” On occasions such as birthdays I might be given a handful of silver dollars rather than dollar bills. A silver dollar was just more impressive than a paper one. Circulating change such as dimes and quarters also were made of silver. There was something hefty and impressive about silver dollars, some of which, the Peace Dollar, had an Art Deco Lady Liberty, some, older ones – having remained in circulation since the late 19th century—had a more matronly figure of Liberty.
The dollar then – exchangeable into a silver dollar—had a lot of buying power. Penny candy cost…a penny. A comic book cost a dime or twelve cents. Now comics cost $3! While it didn’t have the value of a gold dollar of my father’s era you could feel the heft and dignity of it. Like my father before me I didn’t cart around coins to make purchases. But if I wished to I could. People’s ability to exchange currency for silver helped to keep the money honest.
My own children have to make do with “Federal Reserve Notes.” Savant James Grant wittily has dubbed this, “faith-based money,” backed, as it is, only by “the full faith and credit of the United States.” There’s another way to think about it. My children can take a dollar bill into any bank and receive, in return, four quarters. These quarters are made mostly from copper alloyed with nickel, base metals.
So a progression, or more aptly, a regression can be noted: from the gold dollar, to the silver dollar, to the base metal dollar. Metaphorically it is almost a kind of reverse alchemy. This represents a debasement of the standard. The value of the dollar has eroded by some 95% from the day my father was born until today. For the most part it has been a slow process of erosion rather than a dramatic event. That said, history records that the gold dollar held its value – over centuries—and under the gold dollar. History records that with the gold dollar the economy grew, on balance, more steadily and robustly than it has since the last remnants of the gold standard were repudiated on August 15, 1971.
The gold standard, the gold dollar, were not perfect. No human institution can be perfect. And yet, the evidence is abundant that the economy and society under the gold dollar, honest money, thrived in ways that those who have lived only under the “Base Metal Standard” hardly may imagine. There are good reasons to believe that the gold dollar is the least imperfect of all monetary standards that have been tried.
Our government is destroying the dollar.
The fed should be eliminated entirely.
Writer misses the point entirely!
In the past people worked and were paid in real money.
They physically could see the tax they paid.
Today not only are people paid with paper money but the
tax is taken before they get paid.
We are living in a time where up is down and left is right.
Too much of the population has no concept of money and believes that they are entitled.
The writer misses the point in many ways. It is not the “nominal” value (face value) of the money that we pay for something that counts, it is the labor value contained in it.
For example, a loaf of white bread cost $0.25 (25 cents) in 1964. The average wage then was $2.50 per hour. Today, a loaf of white bread can be had for $2.50 and the average wage is $19.00 per hour. So is bread 10 times more expensive?
Not at all. In 1964 it took 6 minutes of average labor to purchase a loaf of bread. Today, it takes about 7 1/2 minutes of average labor. Why does it take more labor time today than previously given how much more productive we are? It’s partly regulation and partly taxes. But it has nothing at all to do with what kind of “money” we use to buy it. Money is nothing more than a repository for labor time. And what that repository is depends on nothing more than what people are comfortable with.
The significance here is that the gold standard was self-regulated by the market itself, and in turn regulated the market.
The “faith based” money we have now, created by the Fed out of thin air, is what causes the booms followed by busts (recessions and depressions).
A college education is the book “The Creature From Jekyll Island”, the story of the birth and times of the Federal Reserve. I’m reading it slowly, with fascination.
“Today not only are people paid with paper money but the
tax is taken before they get paid.”
It’s worse even than that. Inflation taxes us consumers and gives more money to our drunken government.
No government can resist the temptation to debase their currency to spend what isn’t there and what they can’t raise taxes enough to pay for, usually to finance wars and the like.
Why put an ounce of gold into a coin when a half ounce will produce the same coin with the same apparent value. Double your money if not your wealth at the mint. Or triple, .....
Need money for bread and circus? Debase the currency. Need to get ahead of inflation? Debase the currency...till finally the currency is scrap metal and a promise to give more promises in exchange for the notes.
What’s left? Economics at the point of a gun.
The gold standard imposes fiscal discipline and what government will sit still for that?
In the past people worked and were paid in real money.
In 1917 while my Dad was in college he worked for the Veterans Affair’s. His duty was to milk seven cows in the morning and same number at evening. Must remember in this era, farming and related food production was allowed for orphan’s homes and other related industries. Any how, I ask my dad what his pay was, and he said, fifteen dollars a month,
a five dollar gold coin and a ten dollar coin. Gee, wish he could have saved some of those with to-days gold price.
At this point a gold dollar would be a very tiny coin.
I'll go one step further: Those in the Fed that knowingly debased our currency and further ensnared the American people in economic enslavement so as to further enrich themselves should be identified, tried for treason, and executed.
That is, if you can catch them. As ultra-wealthy transnationalists, they have no allegiance to this country and would willingly rebase themselves in any number of foreign countries that are more conducive to their illicit and immoral behavior.
I believe there was a time when one ounce of gold would make $16 dollars.
Years later one ounce of gold made $23 dollars.
Then one ounce made $32 dollars. but then, you could not own gold.
When the US left the gold standard they began to print money at an alarming rate and gold “floated” with the ammounts of dollars printed.
**At this point a gold dollar would be a very tiny coin.**
I used to have some Thai money (baht) that was worth 5 cents back in 1968. Each paper baht had 5 cents worth of silver thread going through it.
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Hey folks if you have just a couple of seconds, could you "flag as spam/overpost" a couple of craigslist posts from a non-stop spammer (or two), it'd help my neighbor out. (He still owes me a little money.)
-——This represents a debasement of the standard.-——
Well actually only part right. There was always a silver dollar, even when there were gold coins. There was no progressive debasement from gold to silver coinage. There was always silver $
LOL! No kidding! I have some 1/10 oz coins, and they are small, but a dollar's worth of gold would be something around a thousandth of an ounce, or less. Even with the 1/10 oz coins, I'd have to cut them into pieces to equal a gold certificate for $20. (But, boy, are they ever PRETTY!)
Type 1 Gold Dollar Specifications
Diameter: 13.0 mm
Weight: 1.672 g
Composition: .100 Cu .900 Au
Edge: Reeded
At today’s prices, and with that weight, one coins is worth close to $80.00
At today’s prices, and with that weight, one coin is worth close to $80.00
At today’s prices, and with that weight, one coin is worth close to $80.00
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