How would you go about reintroducing gold and silver backed currency in the USA?

Just want to throw it out there. Why have a face value at all? You could have rounds in various sizes, perhaps with security features, that are valued based on the spot price. It would work the same way old silver US coins are traded, sold, and bought minus collector value. In other words, how junk silver or bullion is valued. For larger purchases, govt gold rounds would help. Beyond that, I don't know

 

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Excellent idea, except ... and there is always an exception ... except for the people who don't understand the exchange rate is always changing, and many of the cashiers I've run across who can't even make change with our current money.

 

Not really what I was looking for because we would have to revamp the whole money system. With this plan you wouldn't really need to.

 

That cash for clunkers that the powers that be came up with had alot to do with used auto prices as well as inflation.
But I think there's no going back to a gold standard unless of course every thing crashes to zero and we can start over but that's a scary thought in of itself.

 

How in the world is having a $100 coin containing $3 worth of silver any different from having a 25-cent coin containing 4 cents worth of copper and nickel? In each case, the "intrinsic value" of the coin fluctuates with the market value of the metal it contains, but remains well below the face value.

That's a really... odd... definition of inflation.

Did the high inflation of the late 1940s reflect lack of faith in the government? Did the deflation of 2009 reflect extremely high faith in the government?

 

Thats not entirely true. The world has faith in it. Otherwise money would be localized, not good anywhere else. Besides, the only thing that gives gold and silver any value whatsoever is demand. Its a chunk of metal besides. And as it stands now, money is in far, far greater demand than metal. Inflation has little to do with losing faith in government. Devaluation in currency causes inflation, and the causes of that has little to do with the voting public and more to do with GDP stability and world events. My grandparents saw the dollar lose plenty of value, from my grandpa buying his first Model T for a few hundred dollars to his first Cadillac for several thousand dollars...all while gold and silver was backing that dollar.

 

The precious metals themselves would have to become the monetary unit by weight in either metric (grams) or US Standard (grains). Coins would be struck to their weight of precious metal, indicated on the precious metal coins as minted and prices would reflect the amount of weight in precious metal to make a purchase.

Lower cost items of today (possibly less than US$100) could still be purchased with base metal coinage or currency, but these coins and currency would have to be backed with precious metal, as well.

Just food for thought.

 

The only way to abolish the debt is to return the monetary power of printing money back to the federal government, not a private bank owned by private bankers. Just like the red seal notes, instead of it reading Federal Reserve Bank Note it will read United States Bank Note. Didn't Rothchild himself say, "give me control of a nations currency and I care not what its laws are?" Private bankers issue our paper money, not the government.

 

I could see it now. Everyone walking around with their weights and balances.

 

You mean you don't?

 

First of all there was no "high inflation in the 1940s" nor was there any real "deflation in 2009" ... Just because some government hack says it's happening doesn't make it a reality. The price of clothing and hotel stays dropping temporarily does not mean deflation is occurring. It just means people were so broke they are willing to wear their clothes another year and not make any trips. The necessities of life, such as food, continued to shoot up during 2009.

Secondly, the people of the 1940s were much more self-reliant than we are today. In fact no one, other than prison inmates, was dependent upon the government for their next meal. This generation willingly did without or used ration stamps to purchase items they couldn't grow just so they could give more to the war efforts to defeat the Nazis and Japanese.

People born after 1985 can't even imagine what life was like in the 40s, 50s and 60s. Some simple illustrations are: 1) we know how to tell food is bad without an expiration date stamped on it, 2) we know how to entertain ourselves without TV or other electronic devices, 3) we didn't mind sharing phone service with 3-4 other families on a party line and 4) we put cloth diapers on our babies, washed them daily and hung them on a clothesline outside to dry. All of these acts are almost unheard of in those 30 years old and younger. There may be more money available today than in previous years, but there is also more debt than ever before, as people readily hand over their credit cards to buy things now rather than doing without, waiting temporarily while they save up for it.

 

As long as the government is willing to put you in jail for not paying your taxes in dollars, it's not just faith backing up that money...

 

The currency in the United States is the U.S Dollar. It is the currency that monetizes the metal, not the other way around. That value is set by the Congress. It is a government fiat. The gold backed dollar is a fiat currency the same as is the Federal Reserve dollar!

 

Money supply needs to keep pace with economic growth or we have problems - too much money supply growth, inflation; too little, deflation and probable recession. One reason for the panics of the late 1800's probably was failure of the gold supply to keep up with growth. Even Milton Friedman speculated that perhaps we should have gone to silver instead of gold [in 1873] because its supply grew faster and more in line with the economy than gold. See his Monetary History of the US, Chap 3, footnote 52. Expanding bank deposits made up for most of the shortfall, but 1929 etc. showed that that wasn't necessarily a good solution. Central bank fiat money seems to work fairly well; problems are almost always due to an external shock - such as the extortionate reparations imposed on Germany in the 1920's.

 

Read it again, that was not the question. The question was:

And for the record, there is already silver and gold metals in our money. They are called "Commemorative Coins". However, current forms of "money", both coins and currency, is not "backed" by anything other than the Federal Goverments ability to borrow more money from the Federal Reserve Bank which is a private "bank" that has a solitary customer. The Federal Government.

 

Uhhh yeah!

When was the last time ANYBODY carried $1,000 around in their pockets for use in daily commerce? $500? My weekly grocery bill doesn't even come close to $500.

What about yours?

Also, there's a reason they no longer make $500 or $1000 bills. Regardless of the level of inflation the economy is in and regardless of how much a cup of coffee costs, local businesses rarely keep change for $1000 around for somebody walking in off the street much less every customer that walks in.

Gold and Silver "backed" currencies are a thing of the past. If anything at all, money itself would disappear in the form of "electronic credits".

Come to think of it, a lot of money today..........is exactly that. Electronic Credits in the form of dollars and cents on a bank statement. Drop the dollar sign ($) and you're already there.

 

Yes. You are on to something here.

With the minor exception that the "value" of gold would have to be governmentally regulated (as it was until 1974), illegal to own in bullion quantity except for government produced coinage (as it was until 1974) AND the rest of the world would have to go along with the plan.

We are a Sovereign Nation but we have to survive in a "Global Economy".

The reality of the situation is that gold and silver have had a "decreed" relational value of 15 1/2 to 1. The basis of that relationship is what formed "The Gold Standard" which coins of the past were minted to. A 90% gold coin had a government assigned face value of 1 ounce of gold. A 90% silver coin had a government assigned face value of 1 ounce of silver.

The USA went off the "Gold Standard" and adopted the "Silver Standard" in 1934 and in 1964, completely abandoned the Silver Standard in favor of today's Federal Reserve currencies and Copper nickel coins.

To implement a gold and silver "backed" monetary system, would require much, much more than the swipe of a pen since many manufacturing industries, both domestic and foreign, depend upon gold and silver. Regulating those industries would be disastrous from an economic standpoint (just look at Detroit when Auto Manufacturing stopped) because it was and is those very industries which dictated the increase in value for both of those commodities.

Virtually EVERY discussion regarding the return to gold and silver as a monetary standard is deeply rooted in the desire of those supporting the discussion, to get rich off of their current holdings.

From an economic standpoint, it just isn't going to happen regardless of how many times it gets kicked onto the table for discussion. Far too many people have deep holdings in both products for it to ever be successful.

 

Sorry to disagree here but as any student of history can tell you newly mined gold, silver, emeralds, diamonds, etc. has often been bartered by miners for food, drink, loose women, card stakes and you name it in every mining area in this hemisphere up through early 20th century, without any discussion of dollars or pesos at all. In fact all goods and services could be bartered, and maybe should be bartered, but the government frowns on that and has their dog (IRS) tackle all who they discover trying it. So all things have value without a single dollar being discussed in the trade.

 

I don't feel like there needs to be much change to the price of gold and silver. Now I'm not and economist so I don't know if this will work but can't we just stop printing FED notes, make new notes back by gold and silver. Change the design and value of the current ASEs and AGE and tada new gold and silver standard?

 

You make a good point, but miss my point. Many things can and are used as money. Cigarettes are money in prisons. My point is currency which is that form of money declared by law to be legal tender.