If gold standard were enacted today - what would they value gold at?

Bern said:
Jordan already gave you a rough outline of the current real world value, except he was using broad figures. To do it right, you would need to know how many US Dollars exist (both the physical paper and coins and the electronic credit stuff) *and* how much gold the government owns. The government can't back dollars with gold they don't own. Problem is... the government won't disclose, much less allow an audit of, their gold holdings. So there really isn't any way to give you a "solid" figure.
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If anything, my post shows how unworkable a gold standard really is. At a price of $800 per gram, gold's usefulness will include only its use in currency, since it would be too expensive to use in production, and I'm sure all the jewelry/dental demand would damn near evaporate as well.

My laptop has +/- one gram of gold in it. I paid less than $500 for it. If we were to use gold as currency, and give it a value of $800 per gram, I'd have to pay $1300 for the same laptop tomorrow. That's absolutely unreasonable.

There is no reason to price out real, physical production for currency.
 
Seems to me, the smart people would convert their fiat currency to one that doesn't lose value. I would hope they would do that before their fiat currency became worthless.

Of course there will be some who say the fiat currency became worthless because of the competition of currencies, but we know that isn't the truth as even without competition in currencies, the value of the fiat currency is going to become worthless.
 
Are you saying you wouldn't be able to convert those things to precious metals?
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no, but at 1/6th of their previous value? why should anyone holding pm's have a leg-up on anyone else if that's the case? everyone would have to be given equal treatment when reset.
 
cbc58 said:
no, but at 1/6th of their previous value? why should anyone holding pm's have a leg-up on anyone else if that's the case? everyone would have to be given equal treatment when reset.
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Why should everyone get some sort of equal treatment? They would be given the choice of changing over to a better currency before the one they are holding became worthless.

Think competition in currencies and then you should be able to see how simple it would be for people to decide what they like better. They can keep the old fiat currency and watching it become worthless or they can convert their soon to become worthless fiat currency to one that maintains it's value. It would be their choice, nobody would force anyone to change to the backed currency.
 
My point is that gold/silver bimetallism failed horribly. How would competing currencies work? Can you give me an example?
 
Travlyr said:
My point is that gold/silver bimetallism failed horribly. How would competing currencies work? Can you give me an example?
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This wouldn't be bimetallism. This would be coins minted with the weight of the metal in them and the market deciding the value of those metals. There would be no tie between them. No one would be suggesting so many of one coin would be worth one of the other. They are all free to float against each other. That was the problem with bimetallism, some idiot decided to try to peg one against the other.
 
Dr.3D said:
This wouldn't be bimetallism. This would be coins minted with the weight of the metal in them and the market deciding the value of those metals.
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Value based on what? What is a dollar? A FRN?

I'm not trying to be difficult. I just don't understand. Can you provide an example?

There would be no tie between them. No one would be suggesting so many of one coin would be worth one of the other. They are all free to float against each other. That was the problem with bimetallism, some idiot decided to try to peg one against the other.
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lolz ... It is my understanding that that idiot was Alexander Hamilton.
 
Travlyr said:
Value based on what? What is a dollar? A FRN?

I'm not trying to be difficult. I just don't understand. Can you provide an example?


lolz ... It is my understanding that that idiot was Alexander Hamilton.
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If it was him, he was an idiot for doing so.

The value is in what a currency can buy. Prices would be based on the weight of the metal in the currency. If you went to the store, you could buy say, a can of creamed corn for x amount of that metal. The only reason a person would want to know how many dollars it would take to exchange from one currency to another would be to make the exchange. That exchange price would be subject to change just as it is on the currency markets around the world.

Buying food and fuel and the like, would be priced in the weight of the metal being used to purchase it.
 
Jordan said:
If anything, my post shows how unworkable a gold standard really is. At a price of $800 per gram, gold's usefulness will include only its use in currency, since it would be too expensive to use in production, and I'm sure all the jewelry/dental demand would damn near evaporate as well.

My laptop has +/- one gram of gold in it. I paid less than $500 for it. If we were to use gold as currency, and give it a value of $800 per gram, I'd have to pay $1300 for the same laptop tomorrow. That's absolutely unreasonable.

There is no reason to price out real, physical production for currency.
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Here's an idea, let the market decide what is the highest use for gold. Perhaps gold is used in laptops only because its highest use - as money - is illegal? And as soon as the market has the chance it will appropriate all the gold it can get to use as money and find something else to use in lap tops. Or maybe not. I don't know and neither do you, but the market will figure it out easily IF you get government out of the way.

The market is extremely good at allocating resources to their highest use. The inability of any one person - or central committee - to figure out allocation of resources is one of the reasons communism doesn't work. Using or not using a particular commodity as money will be an allocation of resources problem that the market will solve without breaking a sweat.

One thing is for sure, the market is not going to choose unbacked paper as money if it has a choice.
 
Elementary math should be a requirement for being the Treasury Secretary. But the proof is in their work. It started with Alexander Hamilton's bimetallism and continues to this day. Why establish face values on precious metal coins if they don't mean anything? What's up with that?

1 oz of silver - face value = $1 ~ $30 FRNs, Or $1 = $30
1 oz of palladium - face value = $25 ~ $750, Or $25 = $750
1 oz of gold - face value = $50 ~ $1400 FRNs, Or $50 = $1400
1 oz of platinum - face value = $100 ~ $1700 FRNs, Or $100 = $1700
 
Travlyr said:
Elementary math should be a requirement for being the Treasury Secretary. But the proof is in their work. It started with Alexander Hamilton's bimetallism and continues to this day. Why establish face values on precious metal coins if they don't mean anything? What's up with that?

1 oz of silver - face value = $1 ~ $30 FRNs, Or $1 = $30
1 oz of palladium - face value = $25 ~ $750, Or $25 = $750
1 oz of gold - face value = $50 ~ $1400 FRNs, Or $50 = $1400
1 oz of platinum - face value = $100 ~ $1700 FRNs, Or $100 = $1700
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So people don't attempt to use them as currency.

Thing is, people could still use them as currency if the stores would just cooperate. If they would price things in units of precious metals, it wouldn't matter what the stamped value on the face is.
 
same thing really.

so if they do that again, gold becomes only as valuable as it's value pegged to a recognized currency ?

not saying there won't be a black market... but... if it's illegal to own it, what good is it except for mfg. or ornamentation?
 
cbc58 said:
same thing really.

so if they do that again, gold becomes only as valuable as it's value pegged to a recognized currency ?

not saying there won't be a black market... but... if it's illegal to own it, what good is it except for mfg. or ornamentation?
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They don't have an excuse to do it again. Before, when they did it the first time, they claimed their currency was backed by it, even if it wasn't.
 
cbc58 said:
THEY can do whatever they want... and have. THEY make the rules.
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Only when they believe people are not going to revolt. People actually thought the currency was backed by gold. Now they know for a fact it hasn't been for quite some time. If they tried to do it again, they wouldn't get very much of that gold away from the people.

The people make the rules sometimes.
 
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