The interest for loans amounting to ten or more times the value of any supply of gold held in banks clearly could not come back in the form of gold which did not exist; it came back in the form of homes, capital assets, farms, and things of that nature in a 15 - 20 year cycle of expansion and collapse until the bankers finally (1913) implemented Alexander Hamilton's ideas about basing money on federal debt. GRANTED something in that picture has to change now, but we need to move into the future and not back into the past.
I have recently gotten into a discussion with a Paulite about currencies and history.
Wow. It is sure a different view (at times disturbing) of history. But he does mention this 1913 turning point. Can you elaborate on the dangers of the pre-1913 system and the cycles of boom and bust?
The real problem here, as Mr. Grant points out - what we are talking about, is the unit of account.
Maybe gold isn’t the answer, though it’s apparently part of the question - standardization means everyone agrees what a gallon or a meter or a minute indicates. The problem with modern currency units is they aren’t defined! So they all fluctuate in value, and against each other.
One of the key attributes of money is that it serves as a store of value. Paper currencies are convenient, but if they lose this attribute they tend to lose the rest. What do you suggest?
So using your logic, if we redefined a Gallon as 12 ounces overnight you would be ok with that?, after putting 20 gallons of gas in your car and running out after 4 miles driven, it would be OK right?? AFter all it was only done to make sure there was plenty of GALLONS in CIRCULATION and AVAILABLE FOR BORROWING. I guess you really cannot fix STUPID. Our entire MONETARY SYSTEM has been based on FRAUD and COUNTERFEITING for nearly 100 years. and what does the US Constitution have to say about COUNTERFEITING?? By the Way Federal Laws and Acts of Congress CANNOT SUPERSEDE the CONSTITUTION, for it is the SUPREME LAW.
What you are in fact saying is that the value of Gold in today's dollars would have to rise by at least ten times from where it is now to meet the requirements of the more virtual forms of money supply.
In which case: that's what will happen. As fiat shrinks towards zero buying power there will be a rush towards real money. The system will fluidly recalibrate itself, and anyone holding real money - Gold and Silver - will vastly increase their buying power.
All the world's capital is going to rush towards precious metals. Gold will end up at between 10 to 20K per oz in today's dollars - and Silver at something like 1/10 of that.
Note: this will happen whether there is an official Gold standard or not. The free market is going to run, not walk, towards Gold and Silver.
Hope this is helpful.