The US Dollar vs. The Gold Standard

[+DieChecker]

If the US is moved to a Gold Standard, then won't we still be affected by the rest of the world still using a fiat system? Unless we plan to stop using the dollar as a world standard, and stop trading with other nations, then there is still going to be a lot of affect, such as inflation, from foreign currency. It is impossible in the current world of e-trading and global commerce to isolate the US dollar from the rest of the world.

I still think the benefits of initiating a gold standard is not worth the cost. It is like a homeowner investing in solar panels when they are broke. Sure, in 40 years those panels will pay for themselves, but at the moment, the stress of buying them would put that poor fellow into bankruptsy.

[questionmark]

If the US is moved to a Gold Standard, then won't we still be affected by the rest of the world still using a fiat system? Unless we plan to stop using the dollar as a world standard, and stop trading with other nations, then there is still going to be a lot of affect, such as inflation, from foreign currency. It is impossible in the current world of e-trading and global commerce to isolate the US dollar from the rest of the world.

I still think the benefits of initiating a gold standard is not worth the cost. It is like a homeowner investing in solar panels when they are broke. Sure, in 40 years those panels will pay for themselves, but at the moment, the stress of buying them would put that poor fellow into bankruptsy.

Quite so, because imagine that all pull a deGaulle and want their bills paid in gold instead of dollars.

[Yamato]

The US dollar is no different than any other currency and if it did not hit the floor yet it is for two reasons: The introduction of the FED after the great depression and the abolishing of the gold standard by Nixon, those were the two most likely time that it could have flown out of the curve.

Gold doesn't vanish in value 95% in 95 years. If that's not hitting the floor what is? That's a predicable rockslide to zero. The curve will flatten out now that we've come so far, especially in the new global marketplace, but when the US loses its preeminence in the world, having a sound currency is the best prescription for the health of the US economy. The US dollar was solid as a rock under the gold standard but a Greek debt holder doesn't care about that, so long as the US dollars that will come flooding across your borders and buying out your troubled assets are still worth enough to save you from a rusting and desolate future.

In the land of the blind, the one eyed man in king. I recommend buying the US dollar right now on pure technicals for a short-term hold against other currencies, because while the US dollar is no safe haven, people still think it is and so long as that is true they will run to it when Europe falls overboard. I want the kind of monetary policy where that can remain true for another 200 years. You are suspiciously opposed to sound money for some reason, and for a Greek you should probably talk more about your own yard than come trapsing through mine.

[questionmark]

Gold doesn't vanish in value 95% in 95 years. If that's not hitting the floor what is? That's a predicable rockslide to zero. The curve will flatten out now that we've come so far, especially in the new global marketplace, but when the US loses its preeminence in the world, having a sound currency is the best prescription for the health of the US economy. The US dollar was solid as a rock under the gold standard but a Greek debt holder doesn't care about that, so long as the US dollars that will come flooding across your borders and buying out your troubled assets are still worth enough to save you from a rusting and desolate future.

In the land of the blind, the one eyed man in king. I recommend buying the US dollar right now on pure technicals for a short-term hold against other currencies, because while the US dollar is no safe haven, people still think it is and so long as that is true they will run to it when Europe falls overboard. I want the kind of monetary policy where that can remain true for another 200 years. You are suspiciously opposed to sound money for some reason, and for a Greek you should probably talk more about your own yard than come trapsing through mine.

And you could tell me which currency that you left invested without spending it, such as your gold, even in a savings account, has lost 95% of its value over 95 years?

You are basing your assumption on the false premiss that your dollar bill goes under a pillow with your gold for 95 years and then the dollar lost value and the gold did not. Well, that is a false assumption because gold is a commodity, and therefore a money worth investment. My bet is that $1 invested in government bonds 95 years ago has yielded the quintuple of what $1 in gold bought 95 years ago has yielded.

[Yamato]

If the US is moved to a Gold Standard, then won't we still be affected by the rest of the world still using a fiat system? Unless we plan to stop using the dollar as a world standard, and stop trading with other nations, then there is still going to be a lot of affect, such as inflation, from foreign currency. It is impossible in the current world of e-trading and global commerce to isolate the US dollar from the rest of the world.

I still think the benefits of initiating a gold standard is not worth the cost. It is like a homeowner investing in solar panels when they are broke. Sure, in 40 years those panels will pay for themselves, but at the moment, the stress of buying them would put that poor fellow into bankruptsy.

If we take the initiative and go to a gold standard, pegs on the US dollar will be back in business. Countries don't want the expense or the time to buy and hold gold, they'd rather protect their currencies from something that holds value and the US dollar would be it under this scenario. You're predicting the exact opposite of what would happen. There will be no relative inflation in foreign currencies there will be relative deflation. Presuming the Fed would still be at the switch imposing its annual inflation on us year after year but our currency would no longer be devalued compared to global currencies and that will mean a lot in the new global marketplace.

Let Europe choke on its own gluttony. We don't have to join their road to ruin when we're still in the game. Don't be so quick to side with greedy Europeans with an entitlement complex to German taxpayer wealth.

[Yamato]

And you could tell me which currency that you left invested without spending it, such as your gold, even in a savings account, has lost 95% of its value over 95 years?

You are basing your assumption on the false premiss that your dollar bill goes under a pillow with your gold for 95 years and then the dollar lost value and the gold did not. Well, that is a false assumption because gold is a commodity, and therefore a money worth investment. My bet is that $1 invested in government bonds 95 years ago has yielded the quintuple of what $1 in gold bought 95 years ago has yielded.

Huh? I have no idea what you're talking about but I'm not supposing that at all. Gold's value has risen astronomically in the past 95 years. Leaving it without spending it? I don't know what you're talking about. Gold would have protected anyone smart enough to hold it against that 95% destruction in 95 years. Excuse me, but how blind and addled to reality are you?

[questionmark]

Huh? I have no idea what you're talking about but I'm not supposing that at all. Gold's value has risen astronomically in the past 95 years. Leaving it without spending it? I don't know what you're talking about. Gold would have protected anyone smart enough to hold it against that 95% destruction in 95 years. Excuse me, but how blind and addled to reality are you?

Investing your money in government bonds would have to. The only government bonds never redeemed were those of the Confederation and those of Argentina (where the Argie bonds still can pay up). And most at a bigger gain than gold. So your point is only valid for those who kept their money in a pillow for 95 years. That is my point.

[Yamato]

Investing your money in government bonds would have to. The only government bonds never redeemed were those of the Confederation and those of Argentina (where the Argie bonds still can pay up). And most at a bigger gain than gold. So your point is only valid for those who kept their money in a pillow for 95 years. That is my point.

LOL I just told you to buy US dollars and you're still not done complaining about something I didn't say.

I'm not suggesting that gold is the best investment on the face of the earth and your replies seem to think I'm making that argument. I've already said that you shouldn't own any gold if you don't like gold. Buy the next Apple Inc. if you want to get rich. There's always a better investment out there somewhere.

I'm considering short-term junk as one of the most bulletproof investments in my arsenal right now. Riverpark High Yield Short Term looks like the most crash-resistant bond fund available and it pays a respectable 3.66% yield likely headed to 4+%.

[questionmark]

LOL I just told you to buy US dollars and you're still not done complaining about something I didn't say.

I'm not suggesting that gold is the best investment on the face of the earth and your replies seem to think I'm making that argument. I've already said that you shouldn't own any gold if you don't like gold. Buy the next Apple Inc. if you want to get rich. There's always a better investment out there somewhere.

I'm considering short-term junk as one of the most bulletproof investments in my arsenal right now. Riverpark High Yield Short Term looks like the most crash-resistant bond fund available and it pays a respectable 3.66% yield likely headed to 4+%.

No, you are trying to make the argument that gold is a secure investment, while I make the argument that there is no such a thing, especially not overpriced gold as right now.

[Yamato]

No, you are trying to make the argument that gold is a secure investment, while I make the argument that there is no such a thing, especially not overpriced gold as right now.

Gold is a sound basis for money. It's as secure as you keep a thief from robbing it, but I've learned well that not every thief is the cat burglar in the night stealing bags of objects.

If you think gold is overpriced, sell it. Sell it all. You thought it was overpriced a few hundred dollars an ounce ago. You should feel fortunate you were wrong and still have some to sell today.

[questionmark]

Gold is a sound basis for money. It's as secure as you keep a thief from robbing it, but I've learned well that not every thief is the cat burglar in the night stealing bags of objects.

If you think gold is overpriced, sell it. Sell it all. You thought it was overpriced a few hundred dollars an ounce ago. You should feel fortunate you were wrong and still have some to sell today.

You cannot have a fluctuating basis for a stable currency. That would only work if gold trade would be prohibited and gold property of the government. As long as gold can be freely purchased and its price changes daily it is a basis for nothing. That is why, so far, every gold standard currency ended in flop.

[Guest]

Gold is a sound basis for money. It's as secure as you keep a thief from robbing it, but I've learned well that not every thief is the cat burglar in the night stealing bags of objects.

If you think gold is overpriced, sell it. Sell it all. You thought it was overpriced a few hundred dollars an ounce ago. You should feel fortunate you were wrong and still have some to sell today.

Your arguments have little to do with a functional currency.

Br Cornelius

[Yamato]

You cannot have a fluctuating basis for a stable currency. That would only work if gold trade would be prohibited and gold property of the government. As long as gold can be freely purchased and its price changes daily it is a basis for nothing. That is why, so far, every gold standard currency ended in flop.

Every gold standard currency ended in flop? Source please.

And you're not even allowing me to fluctuate! Wow your Keynesian "arguments" never end do they? Everything fluctuates sir. The goal is for it to fluctuate smoothly. We don't want your bedeviled Krugman business cycles anymore, glaringly obvious in your own charts. I can't believe you incriminated yourself like that, and you don't even know it.

[Yamato]

Your arguments have little to do with a functional currency.

Br Cornelius

Right, the US dollar wasn't functional throughout the greatest economic expansion of all time.

[questionmark]

Every gold standard currency ended in flop? Source please.

And you're not even allowing me to fluctuate! Wow your Keynesian "arguments" never end do they? Everything fluctuates sir. The goal is for it to fluctuate smoothly. We don't want your bedeviled Krugman business cycles anymore, glaringly obvious in your own charts. I can't believe you incriminated yourself like that, and you don't even know it.

That is easy: How many currencies are still based on the gold standard?

None, even Switzerland had to give it up a few years back (2000) because the gold standard hindered its economic development. That is what I call a flop. You may call it a conspiracy to deprive you of your false sense of security if you wish.

[Guest]

Right, the US dollar wasn't functional throughout the greatest economic expansion of all time.

That depends on certain definitions now doesn't it !!

Br Cornelius

[Yamato]

That depends on certain definitions now doesn't it !!

Br Cornelius

Yes, and alternatives.

That is easy: How many currencies are still based on the gold standard?

None, even Switzerland had to give it up a few years back (2000) because the gold standard hindered its economic development. That is what I call a flop. You may call it a conspiracy to deprive you of your false sense of security if you wish.

That's your definition of flopping? Governments turning their backs on sound money is no reason to reject sound money. That fiat is so prevalent makes the first major power to stand up with a gold standard on their currency the smartest country regarding monetary policy. That will take an almost impossible amount of fiscal conservatism to pull off, granted the spend-thieves people like Greek debtholders are thriving in today.

Edited October 17, 2012 by Yamato

[questionmark]

Yes, and alternatives.

That's your definition of flopping? Governments turning their backs on sound money is no reason to reject sound money. That fiat is so prevalent makes the first major power to stand up with a gold standard on their currency the smartest country regarding monetary policy. That will take an almost impossible amount of fiscal conservatism to pull off, granted the spend-thieves people like Greek debtholders are thriving in today.

See, you should read up a little on the history of currency. Nixon did not abolish the gold standard because he was turning away from sound money, he did that because else, within months, the US of A would have been bankrupt. What caused that? A very small US creditor, France, insisting on getting paid in gold instead of in dollars for its trade balance. In less than a year the gold at Fort Knox was reduced by ay least 40%, within another year France would have had it all.

And we are talking about a time when the US still had a sound economy. That is not a sound currency, that is a flop.

If every creditor would have followed suit the US gold reserves would have lasted a few months. And why? Because there simply is not enough gold to make it a viable means of exchange. And even the gold hamsters, who tell you all those nice things about your cool investment, know that.

[acidhead]

Quite so, because imagine that all pull a deGaulle and want their bills paid in gold instead of dollars.

Quite so, because imagine that all pull a deGaulle and want their bills paid in gold instead of dollars.

Let the people decide.

[Guest]

Let the people decide.

Its quite obvious from the contributions here - that the people haven't got a clue about economics

Br Cornelius

[Yamato]

You cannot have a fluctuating basis for a stable currency. That would only work if gold trade would be prohibited and gold property of the government. As long as gold can be freely purchased and its price changes daily it is a basis for nothing. That is why, so far, every gold standard currency ended in flop.

You're blind to all history. It did work. It worked phenomenally well, and everything fluctuates in a free market as it should.

See, you should read up a little on the history of currency. Nixon did not abolish the gold standard because he was turning away from sound money, he did that because else, within months, the US of A would have been bankrupt. What caused that? A very small US creditor, France, insisting on getting paid in gold instead of in dollars for its trade balance. In less than a year the gold at Fort Knox was reduced by ay least 40%, within another year France would have had it all.

And we are talking about a time when the US still had a sound economy. That is not a sound currency, that is a flop.

If every creditor would have followed suit the US gold reserves would have lasted a few months. And why? Because there simply is not enough gold to make it a viable means of exchange. And even the gold hamsters, who tell you all those nice things about your cool investment, know that.

So you think that France controls our monetary policy based on what it asks for? LOL We haven't had a sound economy since the advent of the Federal Reserve system because it's been borrowed on the back of our currency ever since. The real growth that didn't have to borrow itself onto the books came before that.

Bankruptcy is a part of our legal system. We are a nation of laws. It's not okay to escape that fact, even when the federal gobmint does it. The federal government with its frankenstein bank thinks it's the end-all, the lender of last resort and the creditor for all times that people are going to run to but there's a limit of even federal insanity and we're heading there fast.

[Yamato]

Its quite obvious from the contributions here - that the people haven't got a clue about economics

Br Cornelius

Explain who you're talking about and provide quotes that back up this lame assertion.

Or they're talking out of both sides of their mouths contradicting themselves, having a Krugman pow-wow one day assuring me "there's nothing wrong with fiat" and limply claiming they're against fiat the next.

[Guest]

Explain who you're talking about and provide quotes that back up this lame assertion.

Or they're talking out of both sides of their mouths contradicting themselves, having a Krugman pow-wow one day assuring me "there's nothing wrong with fiat" and limply claiming they're against fiat the next.

I am against the Currency we use at the moment, , but I am also against the Gold standard. I am for an interest free paper currency pegged to a basket of commodities You see there are other choices.

You really have said nothing other than it worked in the good old days - and that is lame. You have not addressed any of its shortcomings simply claiming they do not exist - which is lame again.

We can go around the houses until hell freezes over - but you have nothing new or interesting to say about money so we are wasting each others time here.

Br Cornelius

Edited October 18, 2012 by Guest

[Yamato]

I am against the Currency we use at the moment, , but I am also against the Gold standard. I am for an interest free paper currency pegged to a basket of commodities You see there are other choices.

You really have said nothing other than it worked in the good old days - and that is lame. You have not addressed any of its shortcomings simply claiming they do not exist - which is lame again.

We can go around the houses until hell freezes over - but you have nothing new or interesting to say about money so we are wasting each others time here.

Br Cornelius

You're against everything and you fly in the face of yourself. You can't have it both ways. You can't turn a blind eye to history and tell me what worked exceptionally well for 100 years suddenly didn't work. I don't know what shortcomings you're talking about other than your changes of subject putting words in my mouth. I didn't say it was the end all. I didn't say that it will solve all economic problems, but other than injecting other problems that don't belong in this discussion you haven't addressed any shortcomings at all.

You said you were done with this thread a long, long time ago. I can't be responsible for you not doing what you say you're going to do. The moment you feel like you're wasting your time here, please go.

Again: Explain who you're talking about here and quote them or else lose your statement to the blizzard of BS that followed it. I can't get a straight answer to any of my questions here and the laundry is piling up fast.

[Yamato]

Paper currency tied to commodities. The Canadian Dollar. The Australian Dollar. The New Zealand Dollar. Been there, done that.

We have had it up to here with Krugman's zero percent interest rates and "too big to fail" financial scams that deplete the honesty and transparency and common sense out of the marketplace and replace it with a statist blend of corporatocracy, sweetheart deals with government fixing prices, setting interest rates, and making the marketplace with force control by robbing winners and small businesses and bailing out losers and gigantic megacorporations.