Message:

<p>[QUOTE=&quot;InfleXion, post: 1468342, member: 29012&quot;]Welcome to CoinTalk, julius <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie1" alt=":)" unselectable="on" unselectable="on" />&nbsp; &nbsp; </p><p><br /></p><p>The critical component of a gold standard is that all units of currency are backed by the same amount of gold, regardless of how much gold. It is the peg / fixed ratio that makes it work. You are correct that there is not enough gold to back all the currency at today&#039;s prices. What would need to happen is that the price of gold would have to rise to the point where all the gold available adds up to the same price as all the currency it is backing. This is one reason why many think gold is very undervalued, and goes a long way to explain why China is buying it at an exponential rate. </p><p><br /></p><p>JPM inherited the short position in silver from Bear Stearns when they went under, and arguably that short position contributed to their demise with $21 silver. So why do they keep it? Conventional wisdom says because they think it will be profitable, however when your company is not obligated to divulge losses, and has a free money line from the Fed that is no longer a motivating factor. The rest of this post is my speculative opinion, but this leaves the next most likely explanation because they want to keep the price of silver low. </p><p><br /></p><p>Why? Because silver is direct competition for the USD, and threatens all fiat currency as a sound alternative. Silver is more of a threat than gold because gold is not realistic for hand to hand exchanges like silver is. Gold is realistic as a peg, but silver is what people can really use as a highly liquid alternative to the system, the peoples&#039; money. At least for as long as the price doesn&#039;t get to high. The Fed does not want that competition, because sound money would block their ability to print money from thin air and to allow for all the things that this money enables to go on, and they can&#039;t hold the short position outright themselves so they have their primary dealers do it for them. So they keep the price artificially low and extremely volatile to influence perceptions and keep people wary of it.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in