If the United States ever went back to a silver standard, wouldn't the only option be massive deflation? Here are a couple things that lead me to this conclusion: Silver eagles are marked as one dollar and are considered legal tender. Although never intended for circulation, you can spend them just as any other one dollar reserve note. This being the case, if one dollar worth of silver were to be 480 grains, they would need to deflate the money supply appropriately to bring silver back to this price. The problem with this with the current gold/silver ratio would put a value of around $60 for a $50 gold eagle. If they went to a gold standard, your silver eagle would only have about $.85 cents worth of silver in it by my calculations. I would think this would not only leave all countries with a dollar reserve holding the bag, it would also wipe out the savings for most of the baby boomer generation. Where am I going wrong....
Mostly what Trex said, it just isn't going to happen, but for arguments sake, the ASE's marked one dollar would not cause a problem. Just as FRN's would be null and void, and would not be considered legal tender any longer, they could just as easily do it with the ASE's
I'm saying that reserve notes would have to be converted into whatever new currency was going to be printed for a medium of exchange. Perhaps some sort of silver certificate from the past. They could charge you 23 reserve notes for a new silver certificate. And by the way, they do declare them worth more than face value. Ask the IRS.
