Return to Gold Standard and price per ounce

Just to be clear, I don't believe we will have a gold standard again. I'm not a survivalist. I'm not a goldbug. I don't believe the dollar will collapse. I own gold and silver bullion because I expect to make money from it. At the same time, I've spent time studying how the gold standard worked prior to World War I in commerce and banking. Very few people know how it worked, although most people believe they do, and there are many misconceptions that confuse economic problems and banking failures with the form of currency in use. It is as absurd as blaming the failure of Continental Illinois National Bank and Trust in 1984 on the fact that the currency wasn't backed by gold rather than on it's failed acquisitions. After World War I, the gold system was replaced by the gold exchange system, which was not well run and led to problems as the fraction of gold behind every dollar decreased. Gold can be money. It was money. Central banks count gold as a monetary asset right now. So does the IMF. Large quantities of gold can be exchanged for fiat money faster than stock trades settle. Ruben has attributed things to me that I never said. That is my point.

 

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This requires some clarification. I saw a report by Societe Generale [hardly a pro-gold organization] that calculated that the $8K metric tonnes of US gold reserves already in the hands of government could back the US currency [or maybe it was total M1] at a gold price of $6,300. I remember the report because it demonstrated that providing substantial gold backing to the dollar is not as outrageous a claim as some people think since this doesn't include any gold in private hands. No, I don't have a link. And please don't infer from this that I believe this will happen. It won't. Money will go from coin and paper to electrons over the next couple of decades, not to gold.

 

No it really doesn't. Using Gold for money is physically impossible at the moment. But when Western Civilization collapses and the economy shrinks to about 1/10000 of its current size, you will be able to use Gold again for money around the fire you'll use to keep yourself warm that is lit in the steal drums that are left over from the post industrial age. But watch out for the hungry dogs scavenging for food. You could be their next dinner.

Ruben

 

That is about the healthiest and most normal thing you've said in this thread and I'll quote this when ever you bring this topic up again.


Ruben

 

Really....mind boggling. I just shake my head when I read this.

Ruben

 

WRONG. WRONG WRONG.

jeez...

Do you look things up before you type them?

Ruben

 

Yeah - when they didn't have any money because they entire REAL economy collapsed.

Ruben

 

I hope you do. It might prevent you from making the blunders that you made in this thread. I don't want to have to repeat myself.

 

Indeed - your WRONG. Your COMPLETELY wrong.

Ruben

 

Except when it didn't.... Big surprise there. The only thing it ever kept in check was economic recovery from normal business cycles and depressions, until it was ditched altogether because A) there wasn't enough Gold to make the illusion work, and B) economic conditions was causing political and general violence.

Ruben

 

Actually, he is correct...and most of that gold is in the Ocean as an unmineable salt.


You couldn't even finance Israel with the available gold...and they seriously considered it when they were suffering hyper-inflation in the last 70's.

Ruben

 

Really? And when there is a run on the banks? Then what?

Ruben

 

Well, I didn't really to expect you to admit your error. You are probably the only one alive who believes Spain's demise was caused by gold and not by their stagnant economic and political system.

Also, I'm still waiting for you to quote all of the deliberate falsehoods that you claim I spread early in this thread. Have you found one yet?

 

Except that the Fed is not a PRIVATE bank but an Public institution...god...

Let me drop a clue on you. The Treasury prints money as needed and Taxes, Debt and Spending are all completely independent economic variables in the modern economy.


Ruben

 

That would be only true if you believe that Monetary Policy doesn't cause depressions...which is patently FALSE. That being said, it is true that other factors cause depressions, and SOME of them can't be controlled. But when you have a Gold Standard, EVERY darn recession becomes a panic and a depression....

And that sucks. Lets be glad it is gone.

Ruben

 

If the bank has mismatched the duration of their assets and liabilities, they have a problem. If the duration is matched, there is no problem. If the bank is soundly run, there won't be a run. Bank runs usually have a cause. They don't just happen. You seem to be referencing bank regulation, which again, has nothing to do with what is used for the currency. Do you really not understand this?

 

You are correct. Proper bank regulation and sound monetary policy is necessary to avoid economic contractions regardless of the form of currency used. We have much better bank regulation now than 150 years ago. If we had fiat currency 150 years ago, you would have had the same economic result.

 

Cut and pasted from www.federalreserve.gov to clarify. I bolded the relevant parts.

Who owns the Federal Reserve?
The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

 

I pretty much doubt that and very insincere to call all the factual postings with references as SPAM.

In any event, here is the LINK for you:

You posted:

http://www.cointalk.com/t113402-2/#post926236

I returned your post with:

http://www.cointalk.com/t113402-2/#post926864

Which include specifically the following

My God - this aspect of economic theory is not that HARD. When someone, lets say YOU or ME or the Chinese, purchase US Treasury Bonds, they TAKE DOLLARS from the market and GIVE THEM to the Treasury where they are REMOVED from circulation. The Value of the Dollar does WHAT now?

I know you can figure this out.

No - it isn't. It strengthens the Dollar which in most conditions means that it is deflationary, although there are circumstances where that might not hold true. Strong dollar = cheaper foreign goods...

Until you recognize the above the conclusions you draw aren't valid enough to even answer.

Your the only PhD in economics who even remotely believes that and the OTHER guys actually have data to prove their hypothesis. Maybe you can read some of that "spam" I posted and see what is factually true with regard to this.

Please.. say something that makes sense.

YOU posted this:
~~~~

Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Quote:
Originally Posted by mrbrklyn View Post
that is correct. Debt is good. Ruben
Since you seem to be here to engage in name-calling, this discussion is ended for me. I'll just leave everyone to ponder your words and decide for themselves.

Read more: http://www.cointalk.com/t113402-2/#post926229#ixzz0rjQL3aNV

~~~~


Are you back pedaling now? Because we were CLARILY discussing public dept, and YOU were CHARILY implying private debt --- OR WORSE, implying that public debt works like private debt.

We can continue with this for 6 more months if you wish, but I'm not letting you off the hook on this anymore. It is ENOUGH. You've been using the forum to peddle the gold standard for YEARS. It is unfair and it should stop. Not only does it have nothing to do with coins, but it is complete SNAKE OIL and breeds ignorance, paranoia and resentment.

On any other topic your the most pleasant guy to talk to, but if you keep pushing this, I'm going to keep smashing it with the facts.

Ruben

 

I already posted this but since your not reading my "spam"