Do we really want a gold standard?

[Becker]

They all advocate a gold standard. Paul and Griffin advocate a 100% gold backed standard, and Paul also advocates competing currencies (I'm pretty sure Griffin supports them too).

Gold standard and competing currency are mutually exclusive.

Schiff is willing to go for the old-school Fed currency that was back by commercial paper and 40% gold. I'm pretty sure he also advocates alternative currencies.

that would still be a set standard, and not competition of alternative currencies. competition will undermine the standard (if that's a good thing, why have a standard?)

Just b/c Paul doesn't have "the U.S. must return to a gold backed dollar" on his platform doesn't mean he doesn't support a gold standard.

what else does it mean?

He's not saying "shutter the IRS" either but he has made his feelings very clear about the income tax and continues to do so. Since he is the champion of the Constitution, by definition he opposes paper money and often says that under the Constitution only gold and silver can be considered legal money.

what's the alternative to legal money? illegal money? or voluntary buyer beware bartering?

 

[emazur]

I just finished watching a documentary called "The Money Masters" which discredits us having a "gold based" money system. Bankers were still able to control our money even when we had a gold standard. My question is, how would reinstating the gold standard hurt the international bankers?

http://www.freedomforceinternational.org/freedomcontent.cfm?fuseaction=meetstill

Still claims that it would be a mistake to return to a gold-backed monetary system because most of the world’s gold now is held by the bankers. This is a deceptively appealing argument. First, it is not true. Central banks do hold more gold than any other single entity; but the total inventory of gold in the hands of private citizens, as bullion or coins or jewelry or known deposits in working mines, is much larger. In addition to that is the vast reserve of gold in the earth and oceans that has not yet even been located or measured. If money were to be restored to a precious-metal base, this largely invisible reserve would be more than adequate to supply the demand. We must remember that the limited supply of gold as a monetary base is an advantage, not a disadvantage. If it were not scarce, it would not have utility as money. The smaller the supply, the more valuable it is. As pointed out in The Creature from Jekyll Island, any amount of gold or silver will work just as well as any other amount. The only difference is how valuable each unit of measure will be. The argument that “we don’t have enough gold in the world” is without foundation, and those who say this do not understand the fundamental mechanics of money.

Bill Still does not make this argument but comes close to it when he says that most of the world’s gold is held by the bankers. Even if this were true (which it is not) we need to ask a question: If gold is so useless, why are the bankers trying to acquire it as fast as they can? And why are central bankers so strongly opposed to gold or silver-backed currencies? The answer is obvious. It is because precious metals still are, and will continue to be, a universally recognized storehouse of value, and that value cannot be manipulated by bankers OR free-spending politicians. But fiat money CAN be – and always will be.

There is a vast difference between bankers wanting to possess gold for themselves and wanting a monetary system based on it. They want to possess gold because they are smart and they know that it is a highly effective storehouse of value. They know that, as fiat currency continues to decline in purchasing power through inflation, their gold supply will increase in purchasing power to preserve their wealth, while everyone else is pushed into poverty. However, having the money supply based on gold is the LAST thing they want because that hampers their ability to earn a profit from their activities. Banks make money primarily from collecting interest on loans. If the money supply is limited by the amount of gold or silver in their vaults, they can loan (and collect interest on) only that amount, no more. If they have the ability to create money out of nothing, they can loan (and collect interest on) virtually an unlimited amount. Just as soon as they make their profit on interest payments, as fast as they can they convert it into gold for their own holdings. The next time you hear anyone say that we should not back our money with gold because the bankers own it all, reply by explaining this reality.

 

[KingRobbStark]

I want competing currencies. Why should I be limited to only one? Maybe I want my savings in gold, and my spending money in some other currency.

 

[Becker]

I want competing currencies. Why should I be limited to only one? Maybe I want my savings in gold, and my spending money in some other currency.

you basically have that now. the only difference is you are forced to accept FRN, but in return, you can force others to accept it. You cannot force anybody to accept anything else, but there is no law stopping you from trading and bartering anything if both parties agree. Anybody is free to waive his right to enforce legal tender

 

[Anti Federalist]

you basically have that now. the only difference is you are forced to accept FRN, but in return, you can force others to accept it. You cannot force anybody to accept anything else, but there is no law stopping you from trading and bartering anything if both parties agree. Anybody is free to waive his right to enforce legal tender

Tell that to NORFED and Bernard VonNothaus.

 

[matt0611]

you basically have that now. the only difference is you are forced to accept FRN, but in return, you can force others to accept it. You cannot force anybody to accept anything else, but there is no law stopping you from trading and bartering anything if both parties agree. Anybody is free to waive his right to enforce legal tender

You have to pay capital gains taxes on gold and silver if you exchange them.

 

[ghengis86]

Gold standard and competing currency are mutually exclusive.

The U.S. dollar will be backed by 1/1600th of a Troy ounce of gold.
The state of Texas will accept U.S. Dollars for all debts as well a Texas Notes, which are backed by 1/90th of a barrel of oil. The State of Nebraska will accept U.S. Dollars and Corn Bucks which are backed by 1/5th of a bushel of corn. Florida will accept U.S. Dollars as well as Swiss Francs for all debts public and private. Amazon will accept U.S. Dollars as well as Bitcoins. The IRS will accept U.S. Dollars, US minted gold and silver coins, gold and silver bullion from other foreign mints, etc.

Perhaps I'm being obtuse, but I don't see how the two are mutually exclusive.

 

[emazur]

Gold standard and competing currency are mutually exclusive.

Correct.

that would still be a set standard, and not competition of alternative currencies. competition will undermine the standard (if that's a good thing, why have a standard?)

If the U.S. actually issued 100% precious metal backed currency, probably not too many people would be interested in alternative currencies. The question is - can it be trusted to maintain the 100% the backing? History suggests no. Competing currencies would keep the U.S. issued currency in check - if government debased the currency, better alternatives would be available. In my opinion, if there was a 100% precious metal backed U.S. currency and competing currencies were legalized, they would probably all be used in the marketplace - with dollars being accepted universally and competing currencies acceptance would be up to the vendor in much the same way that it is up to the vendor whether or not he accepts Discover, Amex, Visa/MC, or all of the above. You're right there are benefits to U.S. currency offering a standard - it is universally accepted and recognized and the gold content of a government gold coin is guaranteed by the government. That's why U.S. Gold and Silver Eagles have a slight premium over 3rd party coins. How could 3rd party coins entice you to accept them over U.S. coins in a market with currency competition? That's something the market will determine - perhaps they will offer much cooler designs, or discounts if you use them at certain merchants (I get discounts at different merchants depending on which credit card I use), or limited runs of certain coin designs that makes them more rare and valuable, or some kind of reward program. Those ideas are off the top of my head, who knows what else the market will come up with.

what else does it mean?

Not sure what you're asking, but the point I was making is that he can believe in something philosophically while emphasizing the importance of achieving other things first.

what's the alternative to legal money? illegal money? or voluntary buyer beware bartering?

Federal Reserve Notes that are debased 2 to 10 percent every year and are considered a national security issue b/c they can become worthless overnight and that are used to bail out gambling banks are the alternative to legal money. There is no Constitutional authority for the government to issue unbacked paper money. But the government we have doesn't much care about the Constitution in matters of money or otherwise.

 

[Becker]

Tell that to NORFED and Bernard VonNothaus.

not that simple.
they were trying to pass it off as legal tender. that's why they used the word "dollar" and presented it as "this is the new $10 silver
If they simply said "This is a piece of silver, take it for any amount you wish, I hope to give it in place of $10, but its completely voluntary"
You don't "do the drop" and then "don't smile, just wait for them to react" if you are not trying to deceive or mislead them.
In addition, NORFED was investigated for Ponzi-like practices, not as simple as "we were just offering people silver for those who want it".

 

[Becker]

You have to pay capital gains taxes on gold and silver if you exchange them.

that's a problem with capital gains tax, doesn't make the exchange illegal.

 

[Becker]

Correct.

If the U.S. actually issued 100% precious metal backed currency, probably not too many people would be interested in alternative currencies.

you might be right. just like not too many are interested in alternatives now, whatever is prevailing and stable, is the winner. if unstable, then people look to alternatives.

The question is - can it be trusted to maintain the 100% the backing? History suggests no.

no kidding.

Competing currencies would keep the U.S. issued currency in check - if government debased the currency, better alternatives would be available.

this assumes David is always waiting for Goliath, and never worn down

In my opinion, if there was a 100% precious metal backed U.S. currency and competing currencies were legalized

i dont understand what "competing currencies legalized" means, is it illegal now?

, they would probably all be used in the marketplace - with dollars being accepted universally and competing currencies acceptance would be up to the vendor in much the same way that it is up to the vendor whether or not he accepts Discover, Amex, Visa/MC, or all of the above. You're right there are benefits to U.S. currency offering a standard - it is universally accepted and recognized and the gold content of a government gold coin is guaranteed by the government. That's why U.S. Gold and Silver Eagles have a slight premium over 3rd party coins. How could 3rd party coins entice you to accept them over U.S. coins in a market with currency competition? That's something the market will determine - perhaps they will offer much cooler designs, or discounts if you use them at certain merchants (I get discounts at different merchants depending on which credit card I use), or limited runs of certain coin designs that makes them more rare and valuable, or some kind of reward program. Those ideas are off the top of my head, who knows what else the market will come up with.


Not sure what you're asking, but the point I was making is that he can believe in something philosophically while emphasizing the importance of achieving other things first.

I was asking what else does gold standard mean if not "the U.S. must return to a gold backed dollar" , even if you take out the word "return" and simply say "US must have a legally mandated gold backed dollar" is that not the only meaning of gold standard?

Federal Reserve Notes that are debased 2 to 10 percent every year and are considered a national security issue b/c they can become worthless overnight and that are used to bail out gambling banks are the alternative to legal money. There is no Constitutional authority for the government to issue unbacked paper money. But the government we have doesn't much care about the Constitution in matters of money or otherwise.

so greenbacks were unconstitutional?

 

[Becker]

The U.S. dollar will be backed by 1/1600th of a Troy ounce of gold.
The state of Texas will accept U.S. Dollars for all debts as well a Texas Notes, which are backed by 1/90th of a barrel of oil. The State of Nebraska will accept U.S. Dollars and Corn Bucks which are backed by 1/5th of a bushel of corn. Florida will accept U.S. Dollars as well as Swiss Francs for all debts public and private. Amazon will accept U.S. Dollars as well as Bitcoins. The IRS will accept U.S. Dollars, US minted gold and silver coins, gold and silver bullion from other foreign mints, etc.

Perhaps I'm being obtuse, but I don't see how the two are mutually exclusive.

its mutually exclusive because, even if Texas dollars are legal, they are not legal tender or enforceable on other states, so it'll quickly be pushed out of the market. If it isn't (which is possible, if your population and resources can self sustain), then the gold standard is undermined, in either case, you cannot have a gold standard AND a competing currency at the same time.

when you say "Florida will accept Swiss francs" you mean "Floridians will all be forced to accept Swiss francs"? or just that everybody is free to accept swiss francs (this is not illegal now).

 

[matt0611]

that's a problem with capital gains tax, doesn't make the exchange illegal.

It makes dealing with other currencies more complicated and less attractive when you have to pay capital gains taxes on them.

 

[DamianTV]

I just finished watching a documentary called "The Money Masters" which discredits us having a "gold based" money system. Bankers were still able to control our money even when we had a gold standard. My question is, how would reinstating the gold standard hurt the international bankers?

A Gold Standard by itself doesnt protect us from the Currency Destructive Nature of Banks. Nor does any Fractional Reserve Banking Requirements. Having a Gold Standard needs to have Fractional Reserve Banking extremely restricted and heavily regulated also is only One Part of the equation. The issue of ANY Nations Currency can not come from any Interest Charging Entity. Trifecta, and even then, it still isnt perfect.

The Currency Restrictions in the Constitution allowed People to use competing currencies, but restricted what the Governmnent could do. "States shall make nothing but Gold and Silver...", that statement restriced the Government, not the People.

Now, as far as Illegal Currency, the only thing I would consider to be Illegal is Counterfeit. People could use IOU's if they so desired. An IOU has as much value as the Creators Willingness and Ability to honor that IOU. Paper Money is no different. It used to be that $20 Dollars was redeemable for One Ounce of Gold. It was an IOU. Since the Government is no longer Willing and no longer has the Ability to repay that IOU, the Value of that Paper Money has gone down and the Value of the Dollar in comparison to the Value of Gold which has skyrocketed.

 

[emazur]

this assumes David is always waiting for Goliath, and never worn down

Some might get worn down, but remember that premium I mentioned before that the U.S. currency would carry gives a small windows of opportunity to other currencies. Also keep in mind that alternative currencies aren't necessarily gold/silver backed - they could be something like "Amazon.com" bucks or bitcoins or platinum or copper or who the hell knows what else.

i dont understand what "competing currencies legalized" means, is it illegal now?

I think that's been answered already, if you wanna keep battling this issue I'll leave it to someone else.

I was asking what else does gold standard mean if not "the U.S. must return to a gold backed dollar" , even if you take out the word "return" and simply say "US must have a legally mandated gold backed dollar" is that not the only meaning of gold standard?

You'd have to ask Ron Paul what he means by gold standard. My take: Federal Government issued gold and/or silver dollars 100% backed by the metal, and (or least be given this option if U.S. precious metal backed dollar not issued) capital-gains-free 3rd party currencies very likely backed by metals. Is that so horrible?

so greenbacks were unconstitutional?

Sure. The Federal government does not have the authority to issue unbacked paper money. There was an early draft of the Constitution that allowed it but after many objections that portion was removed in the ratified Constitution

 

[Becker]

Some might get worn down, but remember that premium I mentioned before that the U.S. currency would carry gives a small windows of opportunity to other currencies. Also keep in mind that alternative currencies aren't necessarily gold/silver backed - they could be something like "Amazon.com" bucks or bitcoins or platinum or copper or who the hell knows what else.

They are not illegal today, they just don't have the advantages in the competition

I think that's been answered already, if you wanna keep battling this issue I'll leave it to someone else.

please do.

You'd have to ask Ron Paul what he means by gold standard.

LOL, so you mean you don't know?

My take: Federal Government issued gold and/or silver dollars 100% backed by the metal, and (or least be given this option if U.S. precious metal backed dollar not issued) capital-gains-free 3rd party currencies very likely backed by metals. Is that so horrible?

No, its not itself horrible, so how is that different than "the U.S. must return to a gold backed dollar" , even if you take out the word "return" and simply say "US must have a legally mandated gold backed dollar"

Sure. The Federal government does not have the authority to issue unbacked paper money. There was an early draft of the Constitution that allowed it but after many objections that portion was removed in the ratified Constitution

 

[Travlyr]

A gold standard is a definition. It was defined in 1792 as an Eagle.

Coinage Act of 1792

EAGLES--each to be of he value of ten dollars or units, and to contain two hundred and forty-seven grains and four eighths of a grain of pure, or two hundred and seventy grains of standard gold.

Competing Currencies simply mean that people are not penalized for trading with each other with whatever they choose.
Ron Paul - Let's Legalize Competing Currencies

In conclusion, Madam Speaker, allowing for competing currencies will allow market participants to choose a currency that suits their needs, rather than the needs of the government. The prospect of American citizens turning away from the dollar towards alternate currencies will provide the necessary impetus to the US government to regain control of the dollar and halt its downward spiral. Restoring soundness to the dollar will remove the government's ability and incentive to inflate the currency, and keep us from launching unconstitutional wars that burden our economy to excess. With a sound currency, everyone is better off, not just those who control the monetary system. I urge my colleagues to consider the redevelopment of a system of competing currencies.

 

[Becker]

A gold standard is a definition. It was defined in 1792 as an Eagle.

Coinage Act of 1792


Competing Currencies simply mean that people are not penalized for trading with each other with whatever they choose.
Ron Paul - Let's Legalize Competing Currencies

who has ever been penalized for trading whatever they choose? NORFED and von Nothaus do not count, they were trying to pass on their own currency as legal tender or US mint issued, that's deceptive and fraud. Had they said "this is what I value, take it for whatever value you wish, and we can voluntarily exchange" there would be no problem.

 

[ghengis86]

its mutually exclusive because, even if Texas dollars are legal, they are not legal tender or enforceable on other states, so it'll quickly be pushed out of the market. If it isn't (which is possible, if your population and resources can self sustain), then the gold standard is undermined, in either case, you cannot have a gold standard AND a competing currency at the same time.

Texas Notes would be accepted in Texas, and any other state that deems it acceptable. I don't see the problem if the "Texas Notes" quickly pushed out of the market; that's the point of competing currencies. The best currency is used. If there's an arbitrage opportunity by buying Texas Notes and selling gold backed dollars, then that too is not a bad thing. Are you saying they are mutually exclusive b/c eventually one currency will be settled upon i.e. mutually exclusive in practice over time, but not mutually exclusive per se?

when you say "Florida will accept Swiss francs" you mean "Floridians will all be forced to accept Swiss francs"? or just that everybody is free to accept swiss francs (this is not illegal now).

No, not forced. I meant Florida, the State will accept Swiss Francs in addition to dollars. So one would have a choice in which currency to pay their taxes, fees, etc.

I think the point of competting currencies is that eventually the best currency will be used.

 

[Travlyr]

who has ever been penalized for trading whatever they choose? NORFED and von Nothaus do not count, they were trying to pass on their own currency as legal tender or US mint issued, that's deceptive and fraud. Had they said "this is what I value, take it for whatever value you wish, and we can voluntarily exchange" there would be no problem.

Who did they defraud? That was big brother caging people for voluntarily trading with each other.

Everyone is penalized for trading. I would gladly work for a dollar an hour today --- Silver Dollar. While it is not illegal for me to do that specifically, I get penalized if I hold it and it goes up in value against a Federal Reserve Note because they will implement a capital gain tax by inflating the $dollar. Another penalty is the Income Tax. If I get paid in Silver, then the IRS will penalize me and make me pay their ransom for working. That is a penalty for trading.