Trump Meeting with John Allison: Wants to abolish Federal Reserve and return to Gold Standard

[helmuth_hubener]

Is that enough?

It's called supply and demand. Supply and demand. You never have understood that, Juan. And they gave you a degree! Affirmative action.

Everything is enough for everything else.

The price system works.

Markets clear.

It's called: Supply and Demand.

Supply and Demand: It's not just a good idea... It's the Law!

 

[presence]

What does Ron propose the competing currency is backed with in his plan?

As per Austrian economic theory "money" should only be backed with subjective value found by market forces; money is just the most widely traded commodity. In Ron's plan to decentralize the money supply, private mints would issue gold and silver certificates; the value of these certificates would be relative to market confidence in the mint; the dollar, backed by nothing; with its legal tender and monopoly fiat stripped, would have to compete and as a result monetary policy would become reluctant to expand the total outstanding USD, as the devaluation would cause the dollar to fall relative to competing currencies; which would move wealth into these currencies and away from the dollar.

Ron's plan is to:

1)
repeal legal tender laws

2)
repeal laws that prohibit private mints

3)
repeal federal laws imposing capital gains and sales taxes on gold and silver


for more info keyword:

Free Competition in Currency Act

 

[Zippyjuan]

Supply and demand for the US to back their currency with gold would be $51,600 an ounce if you went with a 100% standard.

How much gold in the world? Estimates vary but: http://www.cheatsheet.com/stocks/how-much-gold-exists-in-the-world.html/?a=viewall

The latest annual survey conducted by Thomson Reuters GFMS agrees with Buffett. According to the organization, there is about 377 million pounds of gold above ground, or roughly 171,000 tonnes.

This is very close to Buffett’s estimate of 170,000 tonnes made last year. Buffett explained at the time, “Today, the world’s gold stock is about 170,000 tonnes. If all of this gold were melded together, it would form a cube of about 68 feet per side.” While the current estimate of 171,000 tonnes is reasonable, other research suggests the actual gold supply could be even smaller…

US reserves are about 8,000 tonnes.

 

[helmuth_hubener]

Supply and demand for the US to back their currency with gold would be $51,600 an ounce if you went with a 100% standard.

Oh no. Not that.

Please, please, not that.

 

[specsaregood]

What does Ron propose the competing currency is backed with in his plan?

https://en.wikipedia.org/wiki/The_Denationalization_of_Money

Hayek advocates a system of private currency in which financial institutions create currencies that compete for acceptance.[5] Stability in value is presumed be the decisive factor for acceptance. Hayek makes the assumption that competition will favor currencies with the greatest stability in value since a devalued currency hurts creditors, and an upward-revalued currency hurts debtors.[6] Hence users would choose the moneys which they expected to offer a mutually acceptable intersection between depreciation and appreciation. Hayek suggests that institutions may find through experimentation that an extensive basket of commodities forms the ideal monetary base. Institutions would issue and regulate their currency primarily through loan-making, and secondarily through currency buying and selling activities. It is postulated that the financial press would report daily information on whether institutions are managing their currencies within a previously-defined tolerance. Hayek's effort has been cited by economists George Selgin, Richard Timberlake, and Lawrence White

 

[PatriotOne]

in theory "money" should only be backed with subjective value found by market forces; private mints would issue gold certificates; the value of these certificates would be relative to market confidence in the mint; the dollar would have to compete and as a result monetary policy would become reluctant to expand the total outstanding USD

Ron's plan is to:

1)
repeal legal tender laws

2)
repeal laws that prohibit private mints

3)
repeal federal laws imposing capital gains and sales taxes on gold and silver


for more info keyword:

Free Competition in Currency Act

Was that from Ron's book?

 

[specsaregood]

Was that from Ron's book?

Here is the bill the last year he introduced it.
https://www.congress.gov/bill/112th-congress/house-bill/1098

Since his retirement, other members have introduced the same bill.

 

[PatriotOne]

https://en.wikipedia.org/wiki/The_Denationalization_of_Money

I guess I better read one of Ron's books. This is one area I have avoided because it all sounds so boring. Then again I thought politics and religion sounded boring at one time. So wrong. End the Fed a good primer for the novice? Or is there a Money for Dummies book somewhere...lol.

 

[presence]

I guess I better read one of Ron's books. This is one area I have avoided because it all sounds so boring. Then again I thought politics and religion sounded boring at one time. So wrong. End the Fed a good primer for the novice? Or is there a Money for Dummies book somewhere...lol.

The Denationalization of Money - Hayek 1976

that's the source material you're after


available here:

https://mises.org/library/denationalisation-money-argument-refined

https://iea.org.uk/publications/research/denationalisation-of-money

https://liberty.me/library/denationalization-of-money/

http://nakamotoinstitute.org/static/docs/denationalisation.pdf

 

[Zippyjuan]

Oh no. Not that.

Please, please, not that.

How would you construct a gold standard? How would it work? Sure you can have a partial standard where a dollar was only partially backed by gold. Given our current money supply and gold reserves, it could be 50:1 rather than one to one. That would be closer to the current gold price. The standard was partial in the past as the supply of gold failed to keep up with the demand for money.

Gold standards do not involve a free market price for gold. The government says how much gold one dollar is worth. Supply and demand become irrelevant.

 

[presence]

How would you construct a gold standard? How would it work?

1) Audit gold and silver reserves.

2) Auction gold certificates such that 1 cert = 1 oz gold in 100% reserve; likewise for silver. Make the auction payable only in USD.

3) Destroy the dollars used at auction to purchase certificates. Destroy certificates when physical gold is claimed.

4) Outlaw printing of new FRN's

5)Free Competition in Currency Act

 

[Dr.3D]

How would you construct a gold standard? How would it work? Sure you can have a partial standard where a dollar was only partially backed by gold. Given our current money supply and gold reserves, it could be 50:1 rather than one to one. That would be closer to the current gold price. The standard was partial in the past as the supply of gold failed to keep up with the demand for money.

Gold standards do not involve a free market price for gold. The government says how much gold one dollar is worth. Supply and demand become irrelevant.

The market would determine the relative value of the dollar. With the scarcity of gold, I'm sure it would go up and each dollar might become worth 1/51,600th of an ounce or more, probably a lot higher.

 

[specsaregood]

I guess I better read one of Ron's books. This is one area I have avoided because it all sounds so boring. Then again I thought politics and religion sounded boring at one time. So wrong. End the Fed a good primer for the novice? Or is there a Money for Dummies book somewhere...lol.

This is a great, easy read to get you started.
https://mises.org/library/gold-peace-and-prosperity
Gold, peace and prosperity, by Dr. Paul. You can get the digital copy free there.

 

[PatriotOne]

mises.org should have a free ebook for

The Denationalization of Money - Hayek 1976

that's the source material you're after

This is a great, easy read to get you started.
https://mises.org/library/gold-peace-and-prosperity
Gold, peace and prosperity, by Dr. Paul. You can get the digital copy free there.

Thanks both.

 

[Legend1104]

It doesn't have to be based on the ounce. It could be any amount you want. You could use a lot smaller amounts of gold. The point is to just anchor it with gold and then let the market figure it out. Once the gold is anchored to the dollar then the market would readjust prices and then the market would create new equilibriums.

 

[seapilot]

I like the idea of competing currencies. US treasury could issue gold backed notes let them trade freely against FRN. One gold note could represent 1 gram which is around 40 FRN. My guess is FRN would represent its true value in a hurry.

 

[Zippyjuan]

The market would determine the relative value of the dollar. With the scarcity of gold, I'm sure it would go up and each dollar might become worth 1/51,600th of an ounce or more, probably a lot higher.

Isn't that how it works now? Market determining how many ounces of gold to how many dollars? On a gold standard the rate is fixed by the government. Like $20 an ounce for many years.

 

[Krugminator2]

Isn't that how it works now? Market determining how many ounces of gold to how many dollars? On a gold standard the rate is fixed by the government. Like $20 an ounce for many years.

The argument that I heard Steve Forbes make on CNBC was that the dollar should treated as a unit of measurement like yard or an ounce. He didn't really make a good case why that is so crucial.

 

[Zippyjuan]

The argument that I heard Steve Forbes make on CNBC was that the dollar should treated as a unit of measurement like yard or an ounce.

Isn't it a unit of measure now? A measure of relative values of objects and activities? A unit of exchange? You exchange your labor for it and then use it to exchange for goods and services.

 

[Krugminator2]

Isn't it a unit of measure now?

He would say no because the dollar loses value. He would say a can of Pepsi should be the same price in 2016 as it was in 1980 and should be the same in 2040.