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<p>[QUOTE=&quot;InfleXion, post: 1366013, member: 29012&quot;]Interesting, I haven&#039;t read the law being proposed but I also wonder how exactly they would do the conversions between dollar/metal, how often it updates. People would try to play the ratio.. better to have one currency backed by metal. </p><p><br /></p><p>I don&#039;t think gold supply is an issue for backing though. We don&#039;t have to have the same level of gold backing that we used to have, rather just a ratio of dollers per gold backing them, and then maintain that ratio. You could have it like each dollar is backed by 1 nanogram of gold, although the less backing per dollar the more gold is worth so there will likely be some sort of revaluation process depending on the details of that ratio, if that were to be done. That comes down to how much gold is in Ft. Knox, how much of that gold will be backing each dollar, and how many dollars are in circulation. Sure, the ratio could be really small and then every dollar could be backed without needing more gold, but then the price of gold will be much higher. If gold were $2,000/oz, that means that every dollar buys you 1/2000th of an ounce of gold. If the ratio of backing is any less than 1/2000th of an ounce of gold for every dollar, then the price will be higher than that by however much it needs to be. I&#039;m sure somebody could figure out how much gold and how many dollars are in this equation and say what the backing level would be at current levels, but if dollars are removed from circulation then the numbers change.[/QUOTE]</p><p><br /></p>

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