Skip to comments.The Gold Standard Is Coming
Posted on 09/08/2012 5:27:38 PM PDT by bruinbirdman
Pundits are pooh-poohing the plank in the GOP platform that calls for a commission to examine possible ways to set a fixed value for the dollar, declaring it a sop to Ron Paul supporters. And indeed this was a motivation of hard-core political calculators around Governor Romney. But these self-styled, world-weary cynical types didnt put this item in of their own volition. They went along with it because it was pushed hard by Tea Party groups and several U.S. senators and representatives, as well as Ron Paul devotees.
A picture from the gold vault of the Federal Reserve Bank of New York
The yellow metal will be a hot topic in the next 24 months. The commission is going to take on an importance that will astound todays political punditry, besotted as they are with stale Keynesian quackeries about money, taxes and spending.
Why? Events economic and political. The ever deepening financial crisis around the world will force the new Romney-Ryan Administration to considerand quickly, toodramatic measures to deal with the disaster.
The Obama/Bernanke Federal Reserve has been an abysmal failure. No major countrys central bank has been so destructive since the Fed in the 1970s; prior to that, nearly a century ago, it was Germanys central bank, which created a hyperinflation that helped set up an environment for the Nazi revolution.
Unlike other central bank catastrophes this one, so far, is of a slow-motion variety, which is disguising the immensity of the harm being done.
For the first time in our history our credit markets have been rendered incapable of providing sufficient capital for small- and medium-size
(Excerpt) Read more at forbes.com ...
A basket of metals maybe.
There is not enough gold or all metal on Earth to back the US dollar now.
I could see a new kind of Bretton Woods system being made, but a real Gold Standard would be incredibly hard to put in place to back the trillions of dollars out there.
What if you back each dollar with one, genuine atom of gold?
If the rich just gave their fair share of gold to the middle class....
Would it include the trillions in debt and unfunded mandates?
You don’t understand. You have it backwards. Gold is the standard for the value of the new dollar not the other way round. The new dollar will be worth thousands of the old (current) dollars.
The process is known as devaluation. Devaluation and stabilization are the only way the debt can be eliminated.
It is going to happen........ all over the world
Not at all. Figure gold is, what, 1700 per ounce? Peg the dollar to 1/1700 of an ounce. It would be 16.6761901 milligrams. So what if it is a small amount? It would stabilize the dollar immediately at it’s present level.
It is not a difficult undertaking to find out just how this would be accomplished. It's just a matter of fixing a starting price.
The Great Leap Forward, millions starve and it lets the government start over.
Please forgive us Baby Boomers. Even one of the greatest of us, Malcolm, may be suffering from early senility. Microgram of gold, anyone?
And the GOP wanting a “fixed value for the dollar?” Commies! The dollar will adjust to the global market one way or another—lower, of course, because we’re not competitive enough in exports.
Very True, its the end game. Between now and then... who knows?
devaluation will be the worst thing that ever happened to most people. It’s going to be very painful.
-———it lets the government start over.-——
it lets the governments start over.
At $30,000 an oz. there is
You would probably have to create a new currency and phase out the old one in order to make the gold standard work. A gold standard would probably be fairly difficult to pull off with trillions of fiat dollars floating around. Not to mention, what happens to those with large debts denominated in US dollars at the time when they switch back to a gold backed dollar? Wouldn't that wipe out those with debt by making them payback dollars worth exponentially more than what they borrowed.
I mean if you borrowed 35,000 dollars when gold was worth 1800 dollars per oz-- that means that you borrowed the equivalent of 19.44 oz of gold. But suppose the US then went back to a Bretton Woods system of $35= 1oz of gold--suddenly you would owe your creditor 1000 oz. of gold. That would be grossly unjust to inflict on any honest debtor
I suppose that you could try to avoid this by either making the dollar to gold ratio something close to what it is presently, or try to back it with a different commodity other than gold, or at the time of going back to the gold standard you could divide debts denominated in old dollars by whatever gold to dollar ratio they adopt.
If things got really bad, you might even need to create a new currency to replace the old dollar, much like the Germans did in the in the 1920s-30s.
Nixon was an inflation freak? He quit USA gold transfers in 1972 (Volkers idea), absolutely floated the greenback, and instituted price controls because inflation hit 2 1/2%?
Its only been 40 years.
There is not enough gold or all metal on Earth to back the US dollar now.
The only word you are missing in your statement is, "mined." Otherwise, you are correct.
When the dollar was backed by gold, the price of gold was fixed. How to you back the dollar with something that can see its value swing by 25% or more over a matter of months? That would mean the value of the dollar would swing by the same amount. If you are a company dealing in overseas markets then how do you plan for that?
Well, in theory you could just make the gold to dollar rate extremely high, so that 100,000=1 oz of gold, or something ridiculous like that, but I think if we did that it may a bit too cumbersome with all of the high denomination bills floating around. By that point the dollar would be like Yen used to be, and you'd be paying a thousand dollars for a coke.
What do you think of the possibility of phasing in a new currency to replace the old dollar and then back the new currency with metal or some other commodity? Do you think that that may be a more feasible undertaking? What do you think of backing a new currency with a silver standard?
It’ll be a jumpstart for the alchemist community.
Malcom Forbes, leader of the motorcycle gang The Capitalist Tools, died decades ago.
His number 1 son Steve is the author and editor in chief now.
The US could be the leader, but will likely be the follower and accept the gold standard five or maybe 10 years after the rest of the world.
Since the Europeans lack the will to do anything but self destruct, I expect the leadership will come from an economic alliance based in Dubai and Singapore.
A little off topic, but while at the hardware store yesterday I saw a roll of copper flashing (24” x 50’) with a price tag of $650.00!
That’s why I keep buying many things I think we may need in the next 10 years.....may as well have the goods....the dollars won’t be there to buy them in the future.
It is a pipe dream and here is why....
The U.S. does not even have enough gold, at current rates, to pay off the portion of its debt owed to foreign investors. For example, even when gold hit its peak price of $1,895 an ounce in September 2011, there wasn’t enough gold for the U.S. to pay off its debt. At that time, China, Japan and other countries own $4.7 trillion in U.S. Treasury debt - but there was only $445 billion total in gold reserves at Fort Knox. (Source: U.S. Treasury Major Foreign Holdings of U.S. Debt; Office of Inspector General, Audit Report, September 2010)
Yen - what was their cents called?
The Korean Won is close to 1,000 to the dollar
No, that is absolutely on-topic.
“Itll be a jumpstart for the alchemist community.”
Provided by the readyfreddy “venture capitalists” of the Pink Sheet market and the Canadian Venture Exchange.
Count on it.
Personally, I own silver and gold mining company shares but in such a scenario you can bet wishful thinking will out-perform actual miners.
Keep an eye peeled for early-stage lead-to-gold stories! There’ll be a buck in it.
Hmmm. News was boring to a spoiled kid like me back then. Heh. Will have a look and read some actual details about the price freezes. Thanks.
There is plenty of gold to back the dollar, it just has to be priced correctly.
Hey, that’s something.
“The U.S. does not even have enough gold, at current rates, to pay off the portion of its debt owed to foreign investors”
Which is why those “foreign investors” are going to eat their paper. There is no chance - zero - that they are going to get paid. Not now, not ever.
We had the same problem with continentals that we do now with Federal Reserve Notes.
See the appendix of "The Great Income Tax Hoax," by Peter Schiff's father, Irwin Schiff.
That’s pretty close to a dollar.
I agree about the gold and metal, but it is my hope that the oil, coal and outher resources will be enough to cover our debts
No reason to have a “basket of metals.”. Gold by itself will work just fine.
And for those who say there’s not enough gold to back the dollar, you’re wrong. Any quantity of gold can back the dollar. Why couldn’t it?
e.g., A gram?
or just made one troy ounce of gold equal $10,000? $15,000?
Not quite. WAY too many dollars out there to peg at current price of gold.
Estimates are a POG of around 10000 an oz to cover all the Bernanke Bucks out there...
I’d like to get a HUGH grant (ha!) from the 0bama administration to utilize solar and wind power to transmute base metals to gold. Boy oh boy, imagine getting millions from these jerks to do the impossible. Obviously, I missed out on Solyndra or any of the ten or so other goofball solar debacles.
Would this increase the price of an ounce of gold considerably?
[There is not enough gold or all metal on Earth to back the US dollar now.]
Yep. And even if there were — how would a post-modern Technocracy facilitate e-commerce among 7 billion people with “Gold”?
This is nothing but the same old golden-cycle of sheeple fleecing.
The way that the Govt and the Central banks are stealing from everyone is by printing more and more and more money (electronic money). This is not creating value, it is just diluting the value of existing paper, dollar-denominated "assets" with every new dollar that is produced.
That is exactly why the "price" of gold in dollars is up from $300/oz 12 years ago to over $1730/oz today. The purchasing power of dollar savings, dollar pensions, etc. has been WAY diluted. Stealth theft as govt policy.
And, while this is happening, the true rate of inflation is being purposefully under-stated, and interest rates are being artificially depressed - the repression of savers - stealing from savers, pensioners, etc. and transferring that wealth to the biggest banks while trying to save them from their excessive load of debt that will never be repaid.
The much ballyhooed anticipated bond buying by Bernanke and the Fed? That's just printing money for the Fed to use to buy toxic/bad bonds from the biggest banks - again - to save them from their bad assets which have made them insolvent. This is shifting those losses from the banks to the taxpayers and to everyone who holds dollar-denominated assets. What a scam! Why are food prices - in dollars UP so much? The price of oil and other commodities - which are also priced internationally in dollars - are likewise up precisely because the purchasing value of the dollar is way down...
And, this because the world has become awash in so much debt that it will never, and can never be repaid by dollars worth what the original debt was worth. Instead, new dollars (debt dollars) are being created from nothing to pay off the old... Old debt is being repaid by new "dollars" (and Euro's, and etc.) that are in reality worth less and less and less in their buying power.
And, this will continue...
At $30,000 an oz. there is
Double your number.
16 Trillion dollars of debt divided by the 280 million ounces they say we have comes out to about $57,000 an ounce...
Here’s why I’m suspicious about the sincerity of politicians offering to deflate the dollar and pressure for sane interest rates. The main mob of constituents for both political parties is now comprised of government employees, other recipients of government incomes and services that value them as customers.
They prefer to keep the debt regime going as long as possible. They keep the illusion going in fearful bond investors that the debt might be paid with cheapening dollars and hope that more revenues will paid with increasing amounts of cheaper dollars.
IMO, the majority of constituents will continue to push government to inflate the dollar and keep rates insanely low. Higher bond yields would make bond investors even more fearful, as government would be less likely to pay toward the debt as long.
More information is welcome here, though. I have very limited knowledge, and it’s a mess of a puzzle.
Sure, put us back on the gold standard, and simultaneously outlaw the private ownership of gold, forcing everyone to turn in their gold for ObamaBucks. It worked for FDR.