Skip to comments.Signs Of The Gold Standard Emerging In China?
Posted on 10/02/2012 5:11:56 AM PDT by SeekAndFind
To get rich is glorious.
As noted in last weeks column about the rising recognition by authorities in Germany about the virtues of gold, the gold standard is receiving impressive new recognition internationally.
The GOP plank calling for a commission to study possible ways to set a fixed value for the dollar with an unmistakable nod to gold is the most prominent element of the 2012 GOP platform still being heard to reverberate around the world. Meanwhile, it continues to gain impressive momentum in the United States.
CNNs Kevin Voigt writes, in The China Post, Currencies:
"One platform of the recent U.S. Republican National Convention that, ultimately, could reverberate around the world is a plan to study a possible return of the U.S. to the gold standard. While it was perceived as a move to appease the partys extreme right wing, economists like Mundell think the world needs a limited return to the gold standard."
This is by no means an isolated blip on the economic radar screen of China watchers.
(Excerpt) Read more at forbes.com ...
So what would this do to the price of gold? Would governments try to force people to turn their gold it at a price they decide is “fair”?
Sorry...”it” should be “in”. Proofreading is my friend.
If any major country adopts a gold standard, people would start using it at the expense of any fiat currency. This would greatly diminish the ability of the US government to fund its operations through debt and inflation of its currency. It would cause a major reduction in the size of the US military and other nations would naturally rush to fill the power vacuum that results.
Cynically, I would also suggest that once this currency became entrenched, the issuing government could start to debase it, to its own advantage.
The United States dollar is defined by the Coinage Act of 1792 to be between 371 and 416 grains (27.0 g) of silver (depending on purity); and gold vs. silver is 1:15.
No need to re-invent the wheel.
I submit it would cause all non-Constitutional obligations to cease or revert to the States (as they should be). And the icing on the cake, as it were, would be that Fedzilla would finally be reduced to its (near)rightful size.
As long as one major economy links its currency to gold, the US government will not be able to effectively outlaw gold as a currency because the demand from a growing, major economic region will still be strong. It is interesting to see as China is opening up the gold market to individuals, EU countries have sought to restrict gold purchases and the use of cash.
That means silver is $118 per ounce. I doubt that.
Visit any jewelry store in Hong Kong and you will quickly see what the mainland’s standard currency is. :)