Gold Standard

[christagious]

I don't really understand the whole going back to the gold standard thing. If our money is backed up by gold, that means we need to get a lot of gold in our hands; how will we achieve this? The only thing I can think of is doing what we're doing in Iraq with oil, invade somewhere like Africa and get a bunch of gold.
Now I'm sure that this isn't what Ron Paul's plans are but I would like to know how he will implement a gold standard and where he plans on getting enough gold to do this

 

[RustyBrewster]

I think he would simply allow private competing currencies that is backed by gold/silver to be used as legal tender. You're right, for the government to try to hoard enough gold to back up all their notes is kind of ridiculous.

 

[AlbemarleNC0003]

I think he would simply allow private competing currencies that is backed by gold/silver to be used as legal tender. You're right, for the government to try to hoard enough gold to back up all their notes is kind of ridiculous.

Yep. He explains a lot in this video with Fox Business News. This must have been one of the things they saw and realized he had to be silenced.

Ron Paul on competing currencies and other issues.

 

[sratiug]

I think he would simply allow private competing currencies that is backed by gold/silver to be used as legal tender. You're right, for the government to try to hoard enough gold to back up all their notes is kind of ridiculous.

Why is that ridiculous? Printing more money is ridiculous. If we were still on the gold standard, we wouldn't need all the dollars printed since we went off of it, because the few dollars we had then would still be worth more than the total of dollars we have now. Our Federal Reserve notes will be utterly worthless when the dollar really tanks, and that will happen when foreigners start dumping them. We are really on the DEPLETED URANIUM standard, because that's what we give to countries that don't want our dollars.

 

[cristianstan72]

...a very good article, pointing out exactly what Ron Paul is trying to tell americans...Are we that stupid?

http://www.chroniclesmagazine.org/?p=482

 

[pdavis]

There can never be not enough gold to back the dollar (well that is not entirely true, but for the most part it is). You must view money (gold) as a commodity. If there is a small supply of money (gold) and a high demand for it the value of money increases while the price of goods and services decreases.

 

[Gilby]

There can never be not enough gold to back the dollar (well that is not entirely true, but for the most part it is). You must view money (gold) as a commodity. If there is a small supply of money (gold) and a high demand for it the value of money increases while the price of goods and services decreases.

And it's only the printed notes that would need backing. Most money held in a bank would be money market funds (ie. bonds) and you could also hold it more easily in many other assets such as stocks, commodities, etc. Basically, you can have your money in an account that suits your needs the best whether it's price stability, growth, etc. Private banks could also distribute notes that are backed by something other than physical gold.

As for physical coins, there is more than just gold that can be used, such as silver and copper. The dollar is actually a unit mass of silver. That is the legal definition. In 1792, the US government measured the Spanish milled dollars, which was the currency most commonly used at the time, and adopted it as it's standard, which is to be fixed:

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

 

[RustyBrewster]

Why is that ridiculous? Printing more money is ridiculous. If we were still on the gold standard, we wouldn't need all the dollars printed since we went off of it, because the few dollars we had then would still be worth more than the total of dollars we have now. Our Federal Reserve notes will be utterly worthless when the dollar really tanks, and that will happen when foreigners start dumping them. We are really on the DEPLETED URANIUM standard, because that's what we give to countries that don't want our dollars.

What was done was ridiculous. We should have never gone away from the gold standard, but we have.

I would think it would require government coercion and plunder for them to immediately implement a gold standard and hoard enough gold to back up all the green pieces of paper they've created. Allowing for competing currencies to enter the market that are commodity backed would be much easier to implement.

Does anyone know how much gold the federal government currently has? Is there anything in Fort Knox?

 

[ike]

Inflation news:
http://www.digg.com/business_finance/Inflation_in_the_US_now_the_highest_in_26_years

 

[JordanQ72]

If we were still on the gold standard, we wouldn't need all the dollars printed since we went off of it, because the few dollars we had then would still be worth more than the total of dollars we have now.

That's absolute nonsense and flat out wrong...

Using all USD hard currency, you could buy most of the gold that has ever existed. That's the US' currency alone. How would other countries ever manage a gold standard then?

Face it, the worth of the US economy has surpassed the valuation of some trivial and arbitrary commodity. Putting currency on any sort of standard, you might as well put it on pork bellies or MSFT stock. Comparisons against gold pricing is also as asinine. All charts I see posted here cherry pick a nice time frame concerning the last 8 years or so, conveniently ignoring the 2 decades beforehand.

 

[snaFU]

I think what he wants to do is invade africa and make everyone into slaves again that way we can get all the gold for free.

 

[Tom228]

I think what he wants to do is invade africa and make everyone into slaves again that way we can get all the gold for free.

That's...just wrong....

 

[comic_man]

That's absolute nonsense and flat out wrong...

Using all USD hard currency, you could buy most of the gold that has ever existed. That's the US' currency alone. How would other countries ever manage a gold standard then?

I think what Dr. Paul have in mind is to have a ratio of currency to gold. The important thing is not to have the Fed print money irresponsibly and i think there are lots of creative ways to achieve it.

Nothing is impossible.

Having Fed print money whenever they like does not make any sense too!

 

[Brutus]

"Face it, the worth of the US economy has surpassed the valuation of some trivial and arbitrary commodity. Putting currency on any sort of standard, you might as well put it on pork bellies or MSFT stock. Comparisons against gold pricing is also as asinine. All charts I see posted here cherry pick a nice time frame concerning the last 8 years or so, conveniently ignoring the 2 decades beforehand."

Trivial and arbitrary. Ignoring the last 6000 years of recorded history. Gold isn't arbitrary. It is what people, having choice, settled on as having moneyish properties. Gold may not be the best medium of exchange indefinitely into the future, but it sure beats the heck out of a purely political promise, which is what we have now. Remember, the US is $60 trillion in debt (if it had to keep its books like a business does). So, obviously what we have now is working VERY well.

Let the people decide whether they want to hold their wealth in something that can be arbitrarily confiscated via printing, or something which has a relatively fixed supply and is much more difficult to manipulate.

 

[RSLudlum]

During the Rocky D radio talk show in Charleston today, a caller asked the host what he thought Paul's interntions were by pumping up the Gold Standard in light of Paul's gold investments/assets!
The host kinda blew him off but said he would look in to the subject.

 

[Gilby]

Face it, the worth of the US economy has surpassed the valuation of some trivial and arbitrary commodity. Putting currency on any sort of standard, you might as well put it on pork bellies or MSFT stock. Comparisons against gold pricing is also as asinine. All charts I see posted here cherry pick a nice time frame concerning the last 8 years or so, conveniently ignoring the 2 decades beforehand.

In a gold standard, gold is simply the index on which to price things. The point of having the government on a gold standard, or any commodity standard (such as silver, which is really what the US was on at the beginning), is so that the government cannot manipulate it like it does now with their ability to issue more at relatively no cost to them, but at a huge cost to the people forced to use it. With a gold standard you will likely not hold much in the way of physical gold, but instead you will hold funds that are promises to pay in gold or something else indexed to the value of gold.

This idea that a fixed amount of gold causes a problem is simply incorrect, because anything that can be easily exchanged makes up the money supply, therefore, the money supply increases with the increase of available goods and services.

 

[JordanQ72]

Ignoring the last 6000 years of recorded history.

If history is any guide, doing the exact opposite of what we used to do usually works better.

Also, Fallacy - Appeal to Tradition. The reasoning for something being a good idea can't be simply that we've done it for a long time.

Remember, the US is $60 trillion in debt (if it had to keep its books like a business does). So, obviously what we have now is working VERY well.

First off, one has nothing to do with the other. Fiscal mismanagement and government debt have nothing to do with whether we have a gold standard or not. The US government carried debt well before the 1970s. Also, you'll have to expand on your numerical claim a bit.

Let the people decide whether they want to hold their wealth in something that can be arbitrarily confiscated via printing, or something which has a relatively fixed supply and is much more difficult to manipulate.

As far as I know, I can go out right now and buy as much gold as I want. As for manipulation claims, the pricing of gold would demonstrate otherwise.

 

[Truth Warrior]

My understanding is that Ron prefers that the free market establishes the money backing and NOT the government through legal tender laws. Historically, the market has chosen gold and silver as money. Governments choose fiat currencies usually and eventually.

 

[Tom228]

Brutus, keep in mind over the 6000 years of history, monarchs and people have also manipulated the gold supply by, "shaving" the gold coins, adding different metals in to them, ie: lead. If you ever read The Wealth of Nations, Adam Smith talks about how the monarchs did the exact same thing with their silver supply. All of a sudden their money became so worthless, rent was actually paid with corn.

No currency is un-manipulatable. Yes, I am creating new words.

 

[Dr.3D]

It is very simple. Ron Paul wants to allow people to have an alternate currency to the imposed Federal Reserve notes. Allowing people to use another currency, backed by silver and gold would then keep the Federal Reserve a bit more honest. As people see the FED notes losing value next to the alternate currency, they would tend to migrate away from the unbacked currency and slowly, the alternate currency would become more favored and the amount of it in circulation would increase to the point where the backing would easily overcome the 'Debt based' FED notes. It would be a gradual shift, not something that would take place over night.

Presently, there is no alternative allowed to be used as currency. Liberty Dollar was closed down because the FED did not want competition! If the FED had allowed this alternate currency to continue, in time the popularity of it would increase and people would only use the FED notes to pay things like taxes and such but the alternate currency would be widely used in local stores for transactions.

This was working in the City of Austin Texas where the majority of people were using the Liberty Dollar for their local currency.