A picture from the gold vault of the Federal Reserve Bank of New York
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 didn’t 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 today’s 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 consider–and quickly, too–dramatic measures to deal with the disaster.
The Obama/Bernanke Federal Reserve has been an abysmal failure. No major country’s central bank has been so destructive since the Fed in the 1970s; prior to that, nearly a century ago, it was Germany’s 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....
lol.
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.
yitbos
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?
16 milligrams.
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.-——
Almost correct
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.
yitbos
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