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

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cbc58

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

It's about $1400 oz. today - but they wouldn't use that would they? Would they drop that down to $250 or so... or less ?
 
1 tonne = 35,273 ounces

All the gold ever mined = 165,000 tonnes

All the currency in the world = +/- relative value of $50 trillion USD

$50 trillion/ 165,000 tonnes = $303 million per tonne

$303 million/35,273 ounces = $8600 per ounce

Roughly $800 per gram. (Question: Is 1 gram of gold really going to make a difference in an $800 transaction? "Yo, thanks for this washing machine, here's 1 gram of gold." "Keep the change?")

Assuming all the gold ever mined can be located and divided up into currency. If only half is available, double all values.

It wouldn't make sense to price gold under the market value, because then people could just trade in currency for USD at $250 and effectively own $1400 worth of metals. We went off the goldstandard for this very reason.
 
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anyone here have any realistic idea of what it might be ? (i'm talking US only)
 
a 100% fully backed gold standard would require much higher prices than they are now because there is not enough gold at the current prices. In a recent King World News interview Jim Rickards was saying we should go to a 20% backing but I can't remember what he said the price would need to be at but it was higher than it is now.
 
aren't you assuming that is using the value of gold now in dollars vs. a decree coming out of washington that says "gold value is now set at $250 oz".. or something like that. if they pegged it to current dollar values you'd be buying bread at $25/loaf... not what they want.
 
how then? i think this should be up for discussion because it goes to an issue that people peg RP to - moving to the gold standard. if people learn that if by doing so the value of their dollars will be 1/6th what they are now - he doesn't have a chance in hell of getting elected and will only get votes from those holding gold. On the other hand if a brand new sovereign currency is created with lower value gold as backing, then that would have more appeal to the average citizen.

so what's the best and most likely way to get off of fiat and onto some backed currency?
 
Defining the dollar.
Setting a gold standard would not price gold in terms of Federal Reserve Notes. A specific weight and purity of gold would be called a dollar. For example, the Coinage Act of 1792 set 247.5 grains of pure gold at $10. That is what is required to clearly define a dollar. ie. set the standard.

I think the silver standard is a better choice because there is about 15-17 times more silver in the ground than gold. At any rate monometallism is the best choice for honest commodity currency. Gold, silver, platinum, palladium, or a copper standard could be used. But setting only ONE precious metal as a currency standard to value ALL other goods and services provides for a clearly defined medium of exchange.
 
That's what I'm trying to get to: defining the standard relative to todays dollars.
 
Since today's dollars are created out-of-thin-air by institutions, values of goods and services are inaccurate. Defining the standard relative to today's dollars cannot be accomplished. It could be estimated, but it will not be very accurate.

Jordan's estimate is probably as close as anybody.
 
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cbc58 said:
That's what I'm trying to get to: defining the standard relative to todays dollars.
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What RP wants is for the market to determine rates and the value of gold (and silver, platinum, oil, wheat, etc.).

A peg only works if the supply of dollars remains true to whatever value of gold the peg calls for. The reason Bretton Woods was necessary in '71 was because the Fed was inflating the hell out of paper dollars and consequently, gold was worth a hell of a lot more than $35/oz. A peg won't work with a central bank in control of a fiat "equivalent".

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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cbc58 said:
On the other hand if a brand new sovereign currency is created with lower value gold as backing, then that would have more appeal to the average citizen.

so what's the best and most likely way to get off of fiat and onto some backed currency?
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There's not enough Gold to back the currency at $250/oz. A $250/oz price would be terminally deflationary. It's not a matter of amount of Gold, it's the price. The price must be high enough to soak up all the worlds fiat.
 
It's not a matter of amount of Gold, it's the price. The price must be high enough to soak up all the worlds fiat.
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BINGO!!!!



Its eight grade math. For the USA take the money supply (M0, M1,M2,M3) and divided by amount of gold.

most tell you the per oz price should be $5000 to $11000. (depends on which "M" you use)
 
Nothing says the gold has to owned by the government. People own gold and the market can decide what the value in fiat currency of the gold is.

This is why Ron Paul just wants to let people used whatever currency they desire instead of the forced fiat currency. When people use what they like best, the others would soon go by the wayside, fiat would die first. There doesn't have to be a face value printed on gold or silver, but rather, just put the weight of the pure metal on the coin and let the market decide how much of a particular metal is needed to make a purchase. Stores should be pricing their items in weight of gold or silver or whatever metal they desire to do business with.
 
ctiger2 said:
There's not enough Gold to back the currency at $250/oz. A $250/oz price would be terminally deflationary. It's not a matter of amount of Gold, it's the price. The price must be high enough to soak up all the worlds fiat.
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Which cannot be accurately determined. We just got $600 Billion on top of $3 Trillion that was lost and who know what else.
Revaluations will likely precede a commodity standard.
 
The reason Bretton Woods was necessary in '71 was because the Fed was inflating the hell out of paper dollars and consequently, gold was worth a hell of a lot more than $35/oz.
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Right... but didn't they peg the value of the dollar at $35/oz then? So gold, in dollars, was $35/oz. Yes?

So the same thing is happening right now... isn't it?

There's not enough Gold to back the currency at $250/oz. A $250/oz price would be terminally deflationary. It's not a matter of amount of Gold, it's the price. The price must be high enough to soak up all the worlds fiat.
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Doesn't this mean that there must be massive deflation in order to get back to a more prudent financial system??
 
This is why Ron Paul just wants to let people used whatever currency they desire instead of the forced fiat currency. When people use what they like best, the others would soon go by the wayside, fiat would die first. There doesn't have to be a face value printed on gold or silver, but rather, just put the weight of the pure metal on the coin and let the market decide how much of a particular metal is needed to make a purchase.
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o.k. - average voter response here: what are you fu&(ing nuts? why should i vote for someone who wants to wipe out my savings and investments?
 
cbc58 said:
o.k. - average voter response here: what are you fu&(ing nuts? why should i vote for someone who wants to wipe out my savings and investments?
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Are you saying you wouldn't be able to convert those things to precious metals?
 
cbc58 said:
o.k. - average voter response here: what are you fu&(ing nuts? why should i vote for someone who wants to wipe out my savings and investments?
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No doubt. This is a big problem for Ron Paul and his supporters. In our attempt get an honest money system, the other side will demonize the crazy people as voter's paper and electronic money evaporates back into thin air. MSM will claim it to be all our fault.
 
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