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Is A Gold Standard Possible?

Tyler Durden's picture


From Deutsche Bank's Daniel Brebner:

A Future Gold Standard?

A common theme in discussing the gold market is the prospect for a new gold standard in the future. That such a topic is now common says much about the change in attitudes by investors, many who would have ridiculed the mere mention of such a thing as little as five years ago. It also, perhaps, gives a hint as to the desperation of investors in their search for assets which they believe may protect their wealth over the long-term, a period which may experience more than its fair share of event risk.

If gold were to regain its crown as the primary medium of exchange it would dramatically change the way that governments manage their economies – which some would say is a good thing given the results of their management skills thus far. Nevertheless, the imposition of a gold standard would limit the ability of government to affect the supply of money in the economy. The supply of money would rest entirely with the volume of gold holdings that a country would possess and grow in line with its trade balances plus domestic gold production (depending on domestic resources and whether these resources in fact became state property – which we expect should be of consideration).

Why it can work

Many economists shudder at the notion of a gold standard; this is understandable given the school of thought to which most adhere: Keynesian or Keynesian derivative. Keynes saw flexible monetary policy as an important tool in optimising an economy. Gold ostensibly removes this flexibility – and was therefore derided as a ‘barbarous relic’ by Keynes himself. In fact we agree that during certain periods of extreme economic imbalance, such as the Great Depression, substantial monetary flexibility may be required.

Most economists see the great problem of gold as twofold: 1) there is insufficient supply and 2) there is insufficient supply growth.

The first argument is spurious. The volume of gold is not important; instead it is the value that is ascribed to this gold that is important. A zero can easily be added to a paper bill to change its value; similarly it can be added to the value of an ounce of gold. Absolute values are in fact unimportant. As we have already asserted, gold is infinitely divisible. Does it matter that a paper bill is backed by a gram or a kilogram of gold? Theoretically it shouldn’t matter in our view.

The second argument, in addition to being fallacious, shows a certain lack of humility. In order to achieve reasonable price stability within a growing economy money supply also needs to grow. The critical question is, how fast. The rate is important, grow the money supply too quickly and inflation results, too slowly and deflation is the consequence (assuming money velocity is constant in both situations).

We believe there are two key elements which are needed to approach an appropriate rate of money supply growth.

The first: population growth – as the number of users of money changes, a money supply adjustment is needed to prevent the distortions in pricing that this would create.

The second: unleveraged productivity – an estimate of the increase in per capita productivity (or value creation) that a society experiences over time – without the assistance of credit growth.

We start by using general metrics for economic activity. There are several, including GDP and trade figures. The difficulty however is stripping out the impact of significant credit growth on these figures to get the genuine, unassisted, growth for a specific economy. For example, over the past 32 years real US GDP has averaged 2.7% (CAGR). Over the same time frame the US population has grown by 1.1% on average. On this basis   average US GDP growth after a population adjustment is around 1.6%. Of this rate, what has been the debt contribution to growth? If, to keep things simple, we assume that credit has contributed roughly 0.5% per year, this leaves an average 1.1% per annum increase in value or productivity for the US. For this reason we believe that humility is a necessity – there is considerable evidence to suggest that the impressive growth rates and productivity advances experienced over the past several decades have been temporarily boosted by the assumption of unprecedented quantities of debt, on a global level. Perhaps we are not the geniuses we think ourselves to be.

On this basis our expectation would be that the US would need to grow its monetary base by only about 2.2% or so. Long-term gold supply growth trends show a CAGR of 1.6%. While this is close to the necessary 2.2% rate needed to avoid deflationary pressure, it could still be asource of concern for those looking at gold as a viable currency alternative. However this need not invalidate gold as a preferred medium of exchange for while volume growth may remain a challenge, the exact value is still determinable by government – in fact periodic valuation adjustments for gold could conceivably be an ongoing option. Thus a low growth rate in gold volumes could be offset by a small revaluation of the metal itself, thereby preventing deflationary price pressure in an economy.

The problem with the above solution for gold’s apparent excessive scarcity is that it puts government monetary policy makers back in a position whereby they can misprice money with consequential capital distortions a possibility. This is something that market purists would rather not see, but may make a transition to gold more palatable for those accustomed to the flexibility that a fiat currency affords.

Why it probably won’t

While a gold standard could work, we remain sceptical that it will be considered (barring a serious financial crisis, perhaps associated with highly volatile inflation).

In large part we blame the low probability on culture. The world economy has, over the past century, morphed into a highly integrated, government dominated system guided by conventional wisdom (group think). The self-reliant, individualism of the free market has been left behind in favour of a ‘new age’ of coddled consumerism. Culturally this represents a very powerful force in our view, one which minimises creative options/solutions to economic impasses. On this basis we are cautious of predicting such a radical solution to monetary imbalances.


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Wed, 09/26/2012 - 18:28 | 2833866 The Alarmist
The Alarmist's picture

Yeah, after the survivors come up out of their bunkers and start to clean up the smoking, radiating ruin that was western civilisation.

Wed, 09/26/2012 - 18:32 | 2833875 Flakmeister
Flakmeister's picture

You may very well be right,,,,


Wed, 09/26/2012 - 18:35 | 2833882 Divided States ...
Divided States of America's picture

It is but first we need to deal with all the 'gold' that is 90% filled by tungsten.

Wed, 09/26/2012 - 18:38 | 2833892 The Alarmist
The Alarmist's picture

Hopefully the heat blast will take care of separating the metals.

Wed, 09/26/2012 - 18:44 | 2833908 Mae Kadoodie
Mae Kadoodie's picture

Tylers, is that a picture of the elusive Golden Turd?

Wed, 09/26/2012 - 18:51 | 2833924 iDealMeat
iDealMeat's picture

Nothing can be used as any "standard" because everything is manipulated. All systems fail because those that build them exempt themselves from the rules governing them. 

Humanities past and future is to muddle through failure. It is our nature.



Wed, 09/26/2012 - 18:59 | 2833948 AldousHuxley
AldousHuxley's picture

REALITY CHECK: US is not going to pay China back with gold backed currency

Wed, 09/26/2012 - 19:01 | 2833955 The Alarmist
The Alarmist's picture

I thnk the plan is to ship china gold in the circuitry of smart bombs and nukes when TSHTF.

Wed, 09/26/2012 - 19:15 | 2833992 SilverTree
SilverTree's picture

We never went off the gold standard.

Wed, 09/26/2012 - 19:33 | 2834042 Captain Planet
Captain Planet's picture

Considering that .gov rhetoric is just that: rhetoric, I agree.

Gold is still money, eh? And every currency can find its price in gold. +1

To the not-so brilliant banker who wrote this: if supply is your obstacle, why not a gold and silver standard?

Add some copper coinage and some paper vouchers for iPhones, and we can have a truly capita-iCaste monetary system.

Wed, 09/26/2012 - 19:55 | 2834074 AlaricBalth
AlaricBalth's picture

Coincidently this was just posted on another site. Was going to rip it to shreds but figured there are numerous people here on ZH who are more well versed on the topic of gold than I am. The moment I read the author, David Burch, quote Paul Krugman I knew it would be ripe for the picking. So have at it ZHers.

"It's something we hear every time the Federal Reserve announces a new injection of money into the economy. Responses typically include anger about the devaluation of the dollar, but this is usually just a segue into a rant on the "stability" of relying on the gold standard.
If you ever hear this, it is a very reliable indication that the individual has no idea what they're talking about, is an idiot, or both.

Significant banking panics occurred in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933. What do all of these have in common? They all happened under the gold standard. Noted economist Irwin Stelzer elaborates the problem a bit, quoted in a BBC interview saying "picture this: if the amount of money you could issue depends on gold, and let's assume three major gold mines blow up like the coal mine did in Chile -- You wouldn't have any money around, or not enough. So I think it's a silly idea. The Wall Street Journal loves it, conservative economists love it, because they trust it more than they trust politicians."
There seems to be a popular misconception that gold's purchasing power is very stable, relative to the fiat money most mortals never think twice about. In reality, it's exactly the opposite.

Nobel Prize winning economist Paul Krugman sums up how an economy on the gold standard would have fared in the most recent financial crisis. "Faced with the kind of shock we’ve just experienced, the real price of gold would “want” to rise. But under a gold standard, the nominal price of gold would be fixed, so the only way that could happen would be through a fall in the general price level: deflation. So if we’d had a gold standard operating in this crisis, there would have been powerful deflationary forces at work; not exactly what the doctor ordered." "The truth is that returning to gold is an almost comically (and cosmically) bad idea."

Wed, 09/26/2012 - 20:00 | 2834092 AldousHuxley
AldousHuxley's picture



1875 = Rothschild and British PM Disraeli purchase majority shares Suez Canal - regional domination for decades.


1882 = Rothschild establishes first Jewish Colonies in Palestine. *(Full funding, supply, support for? decades) - 1924 = Rothschild establishes "Jewish Palestine Colonization Association" -- Enter Jewish Terrorist Groups - IRGUN, STERN


1930's = British build OIL - PIPELINE from - Kiruk, IRAQ -- to -- Haifa, PALESTINE/ISRAEL.


Great Britain dropping the gold standard in 1931

NOTHING happens by chance

Wed, 09/26/2012 - 21:33 | 2834274 flacon
flacon's picture

Did you know that the "Nobel Prize in Economics" is issued by a Swedish BANK?! No wonder they bestow these prizes on economists who think PRINTING MORE MONEY TO BAIL OUT THE BANKS is the answer:


The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne)

Wed, 09/26/2012 - 23:27 | 2834458 markmotive
markmotive's picture

Gold price would need to get pretty high to make  this happen.

Thu, 09/27/2012 - 04:01 | 2834675 supermaxedout
supermaxedout's picture

1930's = British build OIL - PIPELINE from - Kiruk, IRAQ -- to -- Haifa, PALESTINE/ISRAEL.

Thats very interesting. Now it should be obvious to everybody why the Brits and the US are so much engaged in Syria.  Such a pipeline has to cross Syrian territory.  This time the pipeline is not  planned to end in Haifa but at an harbour in Syria.

Israel has many problems. One of their biggest is the fossil energy supply.

The natural gas pipeline from Egypt is often interrupted and can not be regarded as a sure supply line anymore.  Israel claims to have its own huge natural gas field called Goliath. But there is trouble with this alternatives

a) the biggest chunk of the field does not belong to ISrael. It lies in front of Cyprus, Gaza, Turkey, Lebanon, Syria to. No peaceful coexistence of Israel at the moment in sight, nor a domination of the area via US and UK is in sight. That means the gas stays in the ground.

b) Big oil needs a pipeline from Kurdistan through Syri to bring their conquered oils to the markets. This would also ensure Israels supply. But in Syria the things do not go the way Big Oil and US/UK would like the things going to. The war in Syria can draw on for years with huge negative impact on the Syrians but without significant progress for Big Oil, US/UK.  The Syrian conflict is typical. Huge amounts of money, mercenaries, weapons are flooding the country. The origin of this deadly load does sit in the power centers of this world. The fighting is only then going to stop in case the powers behind this conflict find an agreement.  This is not in sight. So the alternative is that high level of fighting only stops when neither side can win anything anymore. Or in other words when Syria is complete rubbish and a territory of rivaling war lords.  Then the conflict runs on its own feet and needs much lesser supply and money and attention. But its a patt, a deadlock, a stalemate.

c) supply from Lybia which is for sure also planned to find its way to Israel is also not increasing. Has long not reached the level under Gadafi.  And this oil is badly needed in Europe due to the boycott against Irans oil industry.

So something has to give. Without additional oil supply (under tight US control) to the markets the time plays for Iran and against Israel and the US.  The Dollar hegemony of the financial markets is endangered which is needed to finance the US military whose prime job it is to secure the Dollar hegemony in natural resources, most important energy and metals.

So we are at present in some kind of end game. This makes it understandble that Israel is war mongering against Iran but this could also be a propaganda operation while another dirty trick is on the way.   Who knows.

But one things is clear. The US are going to loose a lot once the Dollar goes bust. But for Israel it would be much more dramatic because then the neccesety would arise to be in good terms with their sorrounding neighbours. The friends with the big sticks went home to care for their own problems. This makes it necessary that Israel manages to survive on its own. They can also do without doubt but it needs a long,long time. Generations.

Thu, 09/27/2012 - 07:31 | 2834776 Scalaris
Scalaris's picture

Purely coincidental, that Nathaniel Rothschild raised $2 billion for his investment vehicle 'Vallares', prior to installing ‘BP's’ Tony Hayward as a CEO, prior to buying 'Genel Energy', an oil producer in the Kurdistan region of Iraq with stakes in two producing fields, a major natural gas discovery and significant exploration acreage in Kurdistan.

Another pure coincidence, is the negotiations for percentage ownership, between Chinese military controlled company ‘Poly Energy’, and Nathan Rothschild's listed cash shell ‘Vallares’, for the control of one of the largest oil field in Kurdistan, Taq-Taq, one of the last elephant fields, with estimated reserves of approximately six billion barrels in the ground. These negotiations are based on the argument of Hayward and Rothschild offering ‘Sinopec’ a value proposition, by bringing world-class BP-style managerial and engineering depth to ‘Vallares/Genel’, which will in turn open opportunities for Sinopec, while the Chinese could easily put up the cash to acquire those other ‘Genel’ partners like ‘DNO’ and ‘Heritage’, and roll up the Kurdish fields into a nice-sized JV, to be overseen by Hayward.

The field is presently owned by Sinopec a Chinese state company and ‘Genel Energy’, a company owned by Mehmet Emin Karamehmet, one of the richest Turks in the world, whose assets, including Turkcell, the mobile operator, ‘Genel Energy’ - Northern Iraq's largest oil producer, ‘Baytur Construction’ with $1.5 billion in contracts, ‘Digiturk’ - Satellite TV, Show TV - Entertainment channel, ‘Aksam’ - Daily newspaper, ‘Geden Lines’ with 40 tanker ships and bulk carriers and power distribution and toll road operating companies, have been squeezed out of his control, by the current Turkish government, after he was sentenced to almost 12 years in jail for alleged fraud related to the collapse of ‘Pamukbank’, a bank he previously controlled, despite the overturn of his conviction, pending his retrial.

And as Hayward said last November, ‘Genel Energy’ is planning to build a $400 million oil pipeline to link its Taq-Taq oilfield with Iraq's export pipeline to Turkey's Mediterranean port of Ceyhan, hoping to start construction on the 400,000-barrel-per-day pipeline in the spring and finish by the second half of 2013.

The purest coincidence of all, is that around last year, US agreed to supply Turkey with three Super Cobra helicopters, to replace the helicopters it lost during its campaign against the PKK, as well as predator drones, to aid its fight against Kurdish rebels who have bases in Iraq.


Wed, 09/26/2012 - 20:48 | 2834198 Quinvarius
Quinvarius's picture

Banking panics have nothing to do with being on or off a gold standard.   They are caused bank solvency issues, usually after the bankers extend way too much credit and use way too much leverage.  Adding banking panics to a gold standard argument is pure nonsense.  Fraud is fraud.  Failure is failure.  

Besides, I question the assumption that bank panics and bank failures are bad for the economy. If criminals and frauds are bailed out, they never go away.

The gold standard will always come back on its own.  It is up to governments if they wish to have the stabiity that comes with gold money.  If they don't, they can just reboot every 40 years and let their economies fail.  Money is what it is.  No amount of Krugspew is going to make paper money do anything but damage the economy or gold do anything but add stability.

Wed, 09/26/2012 - 21:05 | 2834222 economics9698
economics9698's picture

I second that.  Banks like creating money out of their ass, and they do it, and when they do the panics follow.

Thu, 09/27/2012 - 07:16 | 2834761 Gavrikon
Gavrikon's picture

Exactly.  Or banks issued so many bank notes they could not possibly redeem them in specie.  This equals a run on the bank.

Wed, 09/26/2012 - 21:45 | 2834300 SAT 800
SAT 800's picture

Merely propaganda and ignorance.

Wed, 09/26/2012 - 22:53 | 2834386 deflator
deflator's picture

  "..noted economist Irwin Steltzer..."

I think it should be "noted" that the Hudson institute is the epitome of the status quo of infinite government growth.

 Banking crises occur because banks issue(too many) more claims than reserves regardless of the monetary standard.

 As far as Krugmans, "missive" goes, this crises isn't out of the woods yet--it's just getting deeper because the whole world "has" been going along with bailing out the banks.

 The same dynamics of human greed will eventually overwhelm the system globally.

  Interesting that the article would cite both Irwin Steltzer(neo conservative) representative of the modern Republican party and Paul Krugman(progressive) of the modern Democrat party. What I find interesting is that both "intellectuals" are in such agreement in condemning sound money.

Thu, 09/27/2012 - 00:44 | 2834535 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

I like the first date you list 1873.  Please read this really old book and educate yourself.

The panics were caused by bad legislation.

It starts a little slow..but give him time.

Read the book, you are in for a big surprise.


Thu, 09/27/2012 - 06:24 | 2834732 NidStyles
NidStyles's picture

People that know very little or essentially nothing should not listen to Krugman. The man is a hypocritical moron and will say anithing if it ensures his position and easy life. He's a true to the breed Statist.


To add, had we been on a gold standard and not had a Fed, the monetary crisis and crash of 2007 would never have happened.

Thu, 09/27/2012 - 11:05 | 2835438 Thisson
Thisson's picture

We need both sound money AND an end of fractional reserve banking.  It's the expansion of credit that leads to financial crises.  IF we switch to gold without limiting fractional reserve banking, we will still have crises.

Thu, 09/27/2012 - 12:24 | 2835713 NidStyles
NidStyles's picture

No we wouldn't. I would be fine.

Wed, 09/26/2012 - 19:52 | 2834076 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

'Tis true.

14k tonnes of gold sit as a reserve on the Fed's books for that reason.

Although the Fed can use gold as money, you may not.

So move along!

Wed, 09/26/2012 - 20:36 | 2834177 Xibalba
Xibalba's picture

there was an audit?  

Wed, 09/26/2012 - 20:05 | 2834096 Al Gorerhythm
Al Gorerhythm's picture

You are correct and the price set is still $42.00 and change.

I can't see for the life of me why we have to keep harping back to a system that was open to manipulation. It was an arbitrary price anyway, which is manipulation in the first price. I keep thinking that a country's currency should be valued by the amount of gold and silver it has in circulation, as a competing currency in the hands of the people. A national capital based monetary system competing with a debt based bankers credit note. Crooked bankers open to balance sheet exposure would be a pleasent change, Barry. Not a bad measure of faith anf hope.

Wed, 09/26/2012 - 21:49 | 2834308 SAT 800
SAT 800's picture

You probably don't understand how hi-bypass ratio single shaft turbine engines operate, either; but for some reason you feel free to comment on the operation of the gold standard; it's a college level course. Why do you imagine you understand any part of it? You have no knowledge of what was open to manipulation, or not; or what that means; or how and why it can be eliminated; you know nothing. Why don't you write us a note about the thermodynamics of turbine engines?

Thu, 09/27/2012 - 01:17 | 2834381 Al Gorerhythm
Al Gorerhythm's picture

Sure. The turbine engine relies upon compression of gasses without the need of moving parts such as pistons. The turbine is used to transfer energy to a shaft as the gasses in the combustion chamber expand upon ignition of the fuel air mix. 

Other than your oxymoronic linking of the discussion of a gold standard to the by-pass ratio of a turbine engine, who the fuck made you the arbiter of who can pass comment on a given subject. I now know one more thing about you; you are a (edit) banker's apologist. 

So, write us a little note on the gold standard (pick any one) and how it worked out so well in the past. Not manipulated, eh? Ask Roosevelt about that, moron. Study the London gold pool manipulation for manipulation, under the management of experts (such as yourself no doubt).

What, did I mention something that upset you, like a reference to Barry?


Oh, and the gold standard is a college entry course!!! Wow! Say's it all. Where did you get your degree, Ha ha havaaad?  Maybe Ponceton? The Bernank needs you, give him a call.

Edit again. Further, the Treasury's book price of gold is $42.2222 / fine ounce. Are they negligent in their management responsibilities, or IS the real price  really $42.2222? Perhaps is it just something they overlooked, their day being absobed in tranny porn and all.. Perhaps you can drop a note to Timmy and get him to fix that for us. Shit, might even save us.

Thu, 09/27/2012 - 04:14 | 2834679 Boeing Boy
Boeing Boy's picture

What do you reckon about a "partial" gold standard in the future, paving the way for gold to become part of the resolution of the crisis?  Reading between the lines and the impressive argument set out by Tyler, this could have merit, a classic compromise politicians always seem to favour..

Thu, 09/27/2012 - 06:17 | 2834692 Al Gorerhythm
Al Gorerhythm's picture

Sorry about the short reply but my understanding of money is that I want to be assured that if I lend out my capital, I want a return of it, not some fractional representation of it. The fractional reserve is not a standard. Gold is a standard because it is a weight, a measure that is inelastic. It measures honesty in exchanges between credit note and capital holders. Because gold measures the worhiness of a promise, what's the problem with adding a few zeros to the gold exchange rate of dollars?

Compromise on gold's ability to make honest measures is a mistake, IMHO (if I'm allowed one, that is).

Thu, 09/27/2012 - 06:29 | 2834734 Boeing Boy
Boeing Boy's picture

I don't doubt you are correct, but having witnessed the totally unconnected (and totally erroneous) group-think, on behalf of western intelligence agencies in the run up to GulfWar2 I can't help but think that the same thing is going on here.  A bunch of Central Bankers all trained to think the same way all pushing in the opposite direction of a gold standard.  Here in the UK politicians bask in the independence of BoE and its ability to printprint print and devalue at whim.  Politicians, being power seekers and control freaks will surely never give up the degree of control required in a gold standard, unless of course we really are headed for the nuclear wasteland scenario?

Thu, 09/27/2012 - 11:11 | 2835452 Thisson
Thisson's picture

Please understand that there is a difference between using gold as a medium of exchange and having a gold standard.  A gold standard implies the use of fiat currency, which puts the central authorities in a position to abuse the printing power.  Note, also, that if you don't limit the creation of credit by banks, you still have the effect of money printing (the credit issued spends just like currency).  We need both sound money and sound limits on banking to have a stable system.

Thu, 09/27/2012 - 21:37 | 2837383 Al Gorerhythm
Al Gorerhythm's picture

Which is the essence of my post above that SAT 800 attacked. ?

Wed, 09/26/2012 - 20:20 | 2834131 GoodMorningMr.V...
GoodMorningMr.VanRumpoy...'s picture

@ SliverTree

That will puzzle some and frighten others.

More right than many here will know or understand. But that type of knowledge is only for the select few insiders, and certain inexplicable unconnected individuals that have a "unique" ability

to figure out and learn things they shouldn't be able to.

Wed, 09/26/2012 - 20:34 | 2834176 GoodMorningMr.V...
GoodMorningMr.VanRumpoy...'s picture

Btw this site is crawling with the so-called "illuminated" ones.

Since day one I've seen you. Yes, I've seen your obvious direct references to me. I've seen much more...

I see YOU. No really I see YOU.

Understand it's not negligence, I chose not to hide myself. You're not surveilling me, I'm surveilling you.

Yes, I know the true meaning of what a "Tyler" is.

Wed, 09/26/2012 - 20:39 | 2834183 DosZap
DosZap's picture

Yes, I know the true meaning of what a "Tyler" is.

You amigo are not alone,many here know now.

Wed, 09/26/2012 - 21:33 | 2834275 Bolweevil
Bolweevil's picture

I am Tyler Duden's self inflicted gunshot wound to the face hole.

Wed, 09/26/2012 - 22:07 | 2834332 hmmtellmemore
hmmtellmemore's picture

"That will puzzle some and frighten others."


What are you refering to?

Wed, 09/26/2012 - 22:04 | 2834329 HurricaneSeason
HurricaneSeason's picture

Yeah, the standard is: If you can't see it, it ain't there.

Thu, 09/27/2012 - 04:27 | 2834683 Sheeple Shepard
Sheeple Shepard's picture

+1 for you

The elites have never left the gold standard, all they did was take the peasents off it by removing their ability to convert their currency into something of value. When you think about it it is genius, the serfs brake their backs for 50 years for what? Next weeks toilet paper.

Wed, 09/26/2012 - 19:04 | 2833966 economics9698
economics9698's picture

The whole fucking idea of a gold standard is to neuter the governments ability to print.  Is this asshole a fucking banker?

Wed, 09/26/2012 - 19:48 | 2834062 Ignatius
Ignatius's picture

And the whole point of the Bill of Rights was to prevent government tyranny.  How's that one working out? Patriot Act, Military Commissions Act, NDAA, Drone Kills of U.S. citizens, loss of Habeas Corpus and torture, etc..

A gold exchange standard is the beginning of the con.  Spend fiat, save gold and invest in whatever floats yer boat.

Wed, 09/26/2012 - 20:15 | 2834134 AldousHuxley
AldousHuxley's picture

laws are deterrents and social guard rails.


murder is illegal but people still committ it for various reasons.


but you've got to be an idiot to buy a house with young children in a bad neighborhood with law breakers as neighbors.


same goes for citizens....time to move out of a country when laws signal direction of a country. You can't stop bad governments but you can relocate yourself to safety. Joos are smart because all the stupid ones died when hitler started to pass laws against them so only vigilant Joos escaped and survived.


US empire is crumbling and going to use her citizens to fight the wars. don't end up in a bodybag and be ready to move out. No flag,  king, president, land, culture is worth your life. NOT GOD SAVE THE QUEEN, FUCK THE QUEEN.

Wed, 09/26/2012 - 21:10 | 2834230 economics9698
economics9698's picture

"FUCK THE QUEEN" I second that.

Wed, 09/26/2012 - 21:54 | 2834312 SAT 800
SAT 800's picture

Reality is a bitch. Darwin is a bitch. Darwinian Reality is a bitch. Fuck our Queen; that;s for sure.

Wed, 09/26/2012 - 20:23 | 2834154 Turin Turambar
Turin Turambar's picture

Fractional reserve banking is the con not the gold standard. 1 to 1 ratio eliminates the fraud and the bubbles. Statists don't like it because it handcuffs the spending. Oh yeah, the guy who wrote this is a complete dumbass, but I've wasted enough of my life's energies refuting these ridiculous monetary fallacies, so I'm not going to throw good time after bad. He should try reading some Rothbard to get a clue.

Wed, 09/26/2012 - 21:01 | 2834220 Ignatius
Ignatius's picture

The con was when the government called in all the gold in '33 (then defaulted on the rest of the world in '71). 

Governments will always break the faith if expedience demands it. Always. 

Full reserve lending is fine after the 'crack-up boom' if one desires an essentially sustainable, no-growth economy.  Otherwise, it would be hyper-deflationary if enacted now.

Wed, 09/26/2012 - 22:06 | 2834331 SAT 800
SAT 800's picture

If one desires? you mean if the central monetary authority desires a "no-growth" economy. News flash; we don't want or need a central monetary authority; and a no-growth economy is what you're going to get; so you better learn how to like it. All the propaganda about "growth" is just that; propaganda. You want employment? Shut off the ships from china. Why does China have most favored nation trade status? who signed that legislation? Bill Clinton. Who sponsored it? Corporate chieftans. We don't need anything from China; Americans can make shoes and underware and everything else; it's called industry. Study the real problem, understand the reality; there's no reason to enrich China except to make billions for Apple; and two dozen other international capitalists. The producer gets all the money and the consumer gets broke; this is called the industrial age; the little joke is there is no post-industrial age; this is it; this is all there is. When I graduated from high school it was illegal to import anything from China and Americans exported shoes to China. What happened? Crooked politicians sold your country out from under you in the pay of corporate chiefs. Start fighting the right battle. Shut off the Chinese Imports; a miracle will occur; employment; and an end to the balance of payments problem. The British ran the world by understanding this; the joke is there is no post-industrial economy; that was a propaganda line they fed you. Globalism means give all your money to China and become bankrupt. Shut off the shipping and watch China implode; it'll be amuzing.

Wed, 09/26/2012 - 22:33 | 2834378 Ignatius
Ignatius's picture

I meant we as in 'our government' which brought the Fed into existence.

Otherwise, I could have written most of what you said, and believe it.

Thu, 09/27/2012 - 11:22 | 2835494 Thisson
Thisson's picture

You can have growth in an economy without debt.  It's called equity.  Whether that growth is sustainable in the long term is an entirely different question (cue Professor Bartlett).

Wed, 09/26/2012 - 21:42 | 2834294 CH1
CH1's picture

The whole fucking idea of a gold standard is to neuter the governments ability to print.

More often, the idea is to limit currency to gold and nothing else. That's a LOT easier to work with than gold, silver, platinum and anything else functioning as currency.

Wed, 09/26/2012 - 19:08 | 2833975 SemperFord
SemperFord's picture

Of course the US will not pay China with gold, first hyperinflation, debt is paid in toilet paper then possible a gold backed currency.

Wed, 09/26/2012 - 22:11 | 2834338 hmmtellmemore
hmmtellmemore's picture

China and Japan own very little US debt compared with US citizens.

Wed, 09/26/2012 - 19:30 | 2834032 THX 1178
THX 1178's picture

That's always been the plan. Same goes for the suckers who took US treasuries for their oil. WE... DRANK... YOUR... MILKSHAKE! WE DRANK IT UP!

Wed, 09/26/2012 - 19:50 | 2834066 Fredo Corleone
Fredo Corleone's picture

Indeed, Daniel Plainview's allegorical example is universally applicable.

Wed, 09/26/2012 - 20:45 | 2834192 THX 1178
THX 1178's picture


Wed, 09/26/2012 - 18:51 | 2833929 cougar_w
cougar_w's picture

I think that one is the Golden Bogie. The Golden Turd is rather larger.

Wed, 09/26/2012 - 20:33 | 2834173 DosZap
DosZap's picture

Snagged a few today, and spoke to my multi billion dollar dealer today about this issue.

Seems they were considering an Ultrasonic machine, but they had not been able to find one capable enough to read the bars.And most coins do not have flats a 1/4" wide to scan even if it would work on them.

They own their own refinery, and said as far as they were concerned there in only one 100% foolproof way to make sure, and that's is melting the product, and doing the std acid tests for actual karat purity..

I said in a way, I guess it really doesn't matter on 1oz coins, as no one (even them) would consider checking each one of the multiple hundreds of thousands sold yearly.

So, as long as you do not have to melt it to prove's not worth the worry.And as long as they will buy them back, should I ever want to sell, no questions asked,no testing done,why should I care.

Me, I personally am going to stick with the top3 major soverign coins,bought from a BIG dealer,I figure that is the best insurance one could resonably have.

It is, what it is.

Wed, 09/26/2012 - 22:13 | 2834342 hmmtellmemore
hmmtellmemore's picture

@DosZap, would a Fisch gold coin tester be able to identify fake gold coins, Eagles and Kruggerands? 

Wed, 09/26/2012 - 21:25 | 2834252 Banjo
Banjo's picture

Yes Divided States ... dont buy gold its too risky. Trust the FED and printed money. Its a flight to safety buy as much FED paper as you can for your security.


This strategy has many benefits you don't have to take personal responsibility for vefifying those pesky gold bars using ultrasonic non intrusive methods and if it does go bad you can blame someone else. After all it wasn't your fault.


Of course it would be supremely ironic if even tungsten was far more valuable than paper FRN's in relative terms. LOL

Wed, 09/26/2012 - 18:32 | 2833877 Mr. Fix
Mr. Fix's picture

I'm already in the gold standard.


Wed, 09/26/2012 - 18:56 | 2833941 zerozulu
zerozulu's picture

$ is backed by DoD and gold is backed by nothing.


Wed, 09/26/2012 - 19:34 | 2834043 PiratePawpaw
PiratePawpaw's picture

1> DOD is kinda girly these days. There are a few competitors out there.

2> DOD is largish. makes em kinda an easy target.

3> DOD is rather oil dependant. Being dependant is kinda suckish.

4> Gold is niether girly, largish, dependant, or suckish. It just is.



Wed, 09/26/2012 - 20:19 | 2834144 AldousHuxley
AldousHuxley's picture

DOD working on robotic chimps which are programmed to steal gold from Russia and China.



Wed, 09/26/2012 - 19:39 | 2834051 goldfish1
goldfish1's picture

gold is backed by its own intrinsic value

Thu, 09/27/2012 - 00:52 | 2834542 CH1
CH1's picture

Evidently the paid trolls are down-arrowing individuals rather than ideas.

Why else would they ding a perfectly true statement?

Sunstein needs a cleverer crew. Better increase the budget.

Wed, 09/26/2012 - 19:50 | 2834071 Mr. Fix
Mr. Fix's picture

The picture on the main page looks a lot like a golden "Turd".

........Just needs a yellow hat................

Wed, 09/26/2012 - 20:02 | 2834101 New_Meat
New_Meat's picture

he'd take the "turd".  kinda' guy that he is ;-) - Ned

Wed, 09/26/2012 - 18:33 | 2833878 NotApplicable
NotApplicable's picture

Of course gold doesn't need a standard, as it IS the standard.

Which is why the meddling kids d.b.a. "government" have fought tooth and nail to destroy its integrity.

Wed, 09/26/2012 - 19:02 | 2833954 Daily Bail
Daily Bail's picture

James Grant: Life Behind Bars For Bernanke

Another op-ed. Grant goes for the jugular.

Wed, 09/26/2012 - 19:39 | 2834050 pamriallc
pamriallc's picture

There's no problem with a non-gold standard if it includes a balanced budget.

Wed, 09/26/2012 - 20:01 | 2834097 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

A politician seeking re-election will always print.

Wed, 09/26/2012 - 21:16 | 2834240 Pure Evil
Pure Evil's picture

Especially with 47% of the population sucking off the EBT goobermint tit.

Thu, 09/27/2012 - 08:47 | 2834942 odatruf
odatruf's picture

Because this comment is so incorrect, it's not helpful. Is that you, Mitt?

Thu, 09/27/2012 - 08:50 | 2834963 odatruf
odatruf's picture

Politicians seeking reelection, will do what the masses want. The masses, being asses, think easy money is a solution. Therefor, the politicians print.

They do it because we demand it.

Wed, 09/26/2012 - 20:19 | 2834143 Bicycle Repairman
Bicycle Repairman's picture

Yes, America needs more personal responsibility, but let's not get carried away.

Wed, 09/26/2012 - 19:01 | 2833956 Skateboarder
Skateboarder's picture

I thought we were on the tungsten standard.

Thu, 09/27/2012 - 00:32 | 2834528 e_goldstein
e_goldstein's picture

Yep. You hit in on the head. Gold, silver, and whatever the hell else people want to use in a society can be used as competing currencies. The only people that a banking system (i.e. fiat, rice, or gold standard) benefits are the banksters and the politicians who have their lips wrapped around bankster dicks. 

Wed, 09/26/2012 - 19:31 | 2833905 Fredo Corleone
Fredo Corleone's picture

"If gold were to regain its crown as the primary medium of exchange it would dramatically change the way that governments manage their economies..."

Therein lies the rub: "...the way that governments manage their economies."

Until the free flow of capital returns, and the metastasization of Government is reversed, all else recounted in this article is moot. "Manage" the economy ? Government has no business doing so, in a truly free society. This nation did not grow to economic greatness by virtue of central government parasitism.

Wed, 09/26/2012 - 20:06 | 2834111 SafelyGraze
SafelyGraze's picture

"The world economy has, over the past century, morphed into a highly integrated, government dominated system guided by conventional wisdom"


what *he* said.

am in complete and total agreement.

Wed, 09/26/2012 - 18:44 | 2833912 LMAOLORI
LMAOLORI's picture



Now I see why you call yourself The Alarmist lol 

I don't know why people think it would be so hard to price Gold.

The process is very simple in theory: just divide the price of something in currency by the value of gold in that same currency on the same date.

One thing is certain we won't get to find out as long as obama is in office he's just taking us down the road to collapse and it's by design.

We have to do nothing less than create a new world economic order and secure the place of the American people within it.” The central arguments I made were “We’ve got to pay the price today to secure tomorrow” and “We’re all in it together.”

Fed Virtually Funding the Entire US Deficit: Lindsey

Wed, 09/26/2012 - 19:17 | 2833968 sunaJ
sunaJ's picture

Yes, D.B. of DB, let's talk standards, since we know your master has been sleeping around for some time now. If we apply standards to women, it is best that you find a woman that has some, rather than an adulterous trollop with none - that is if you are interested in a true and faithful (might I add: gorgeous) woman. If you are wedded to a woman that has low chances of corruption, you can spend much less of your time worrying about her out in the world. Yes, minor adjustments may have to periodically be made, but it is a rather simple relationship. If you are wedded to some whore, with no standards, no intrinsic value and implied susceptibility to any and all manipulations and corruption of man, well, then eventually everyone recognizes you as a cuckold as she stumbles bow-legged around the world.  Meanwhile, you are probably raising someone else's kids and are undoubtedly spending all of your time vainly fretting about her worth and fidelity.  Maybe that kind of lifestyle can be faddish in culture, but it will never endure and usually ends badly.

All it will take is one currency regime to decide it is going to have standards and we can let market forces decide if it is coveted or not.

Thu, 09/27/2012 - 09:31 | 2835121 odatruf
odatruf's picture

On your last point, it makes one wish that one of those small African nations that has large gold resources would wake the fuck up, kick out the looters, place a firm, non-corrupt hand in control and set about building a gold based currency economy. Their standard of living would go through the roof as their gold backed currency would appreciate against the shit paper of everyone else. Sure exports would become price prohibitive, but if all they exported was gold then it wouldn't matter.  And importing iJunk would become a laugh, as would industrial machines and everything else needed to modernize their society.

In almost every case, I oppose nationalizing assets, but to have this happen and show the world what stupidity currently reigns, it would be worth it.


Wed, 09/26/2012 - 19:15 | 2833993 GOSPLAN HERO
GOSPLAN HERO's picture

The U.S. Constitution and the Coinage Act of 1792 enshrine gold and silver as MONEY.

... let's get back to basics!

Wed, 09/26/2012 - 22:16 | 2834349 SAT 800
SAT 800's picture

Always a good plan. Basics are good. The Constitution was written by men who had studied, in books, a lot of history; one of the things they were aware of was the ruin of the French monetary system in the early 18th. century. Then, they were able to watch the French ruin their monetary system all over again in 1798. This wasn't any kind of Phd. thesis they were working off of; it was; hey look what happens in the real world, when governments print money?

Thu, 09/27/2012 - 00:36 | 2834530 e_goldstein
e_goldstein's picture

Fuck that. The coinage act was a way to allow the banksters of the time to retain control. People should be able to pay their taxes in whatever they produce. If that means whiskey, geese, ducks, dresses, or silver or gold, so be it.

Thu, 09/27/2012 - 07:42 | 2834787 Ace Ventura
Ace Ventura's picture

Paying in geese and dresses worked in the pre-industrial era. Kinda hard to pay for a new car or house in geese these days. Even if it were feasible, what are the odds the person you want to buy from needs what you produce? Best to have a form of value exchange that is desired by all parties, thus trusted and useable as an exchange for something the receiving entity actually needs. Hence, gold and silver are money.

Although I do share your correct suspicion of any 'acts' implemented by gubments.

Thu, 09/27/2012 - 08:57 | 2834998 odatruf
odatruf's picture

I co-own a medical office and we do more barter based business than you might imagine. Mostly for trade work we need anyway No ducks or dresses so far, but I'd consider anything if I had a use for it or could then exchange it with someone else.

For sure it is a low percent, but it could go higher if we sought it out more.

When that woman running against Harry Reid mentioned it, I didn't bat an eye. And her comment prompted several such exchanges because people asked about it.

The lesson: if you can produce something of value, ask people you buy from about a swap.

Thu, 09/27/2012 - 08:56 | 2834997 GoldenTool
GoldenTool's picture

When did the Gov start taxing production, property?  Tithe up serf.   O I forgot that's what they fought against.


Our forefathers are rolling over in their graves.  Down arrowed both of you for being dumb.


"Do unto others."

Thu, 09/27/2012 - 11:27 | 2835518 Thisson
Thisson's picture

Dont need any income taxes.  When the nation was founded, we had a small government funded by tariffs and excise taxes.  That was sufficient back then, and should be sufficient now.

Wed, 09/26/2012 - 20:01 | 2834095 jekyll island
jekyll island's picture

End the Fed

Wed, 09/26/2012 - 22:57 | 2834395 Newager23
Newager23's picture

This is my crowd. Most of you understand that we are toast. We are literally in the last few years of having 50 states (Texas will secede first) and our current way of life. The USA as we know it is going bye-bye, and nearly everyone (except this crowd) does not see it coming.

I wrote The Demise of America after the Lehman collapse, because I knew that was the omen that the end was near. We've been able to stave off the implosion of the remaining investment banks on wall street with money printing and bailouts, but we have only bought some time. We are in nothing more than a countdown to the end.

So, gold standard? Most definitely, although it will appear in several different flavors. The only question is which currency gets some gold backing first. My guess is that it will probably a new currency that appears soon with some gold backing, perhaps 15-20%.

Gold is in vogue and that trend is not going away. And it should be in vogue. It is the best alternative to all of the fiat junk out there. I like the Australian dollar, but it is expensive to fly to Australia to do banking. I also like the Brazilian real, but again a long way for banking.

Gold is going much higher for these reasons. Just beware that it won't go up in a straight line. The manipulators/spinners will try to slow the rise and will have some success. However, this gold bull market is not nearly finished. (for gold & silver mining stock investors)





Thu, 09/27/2012 - 07:11 | 2834757 GCT
GCT's picture

Newager what are your thoughts on the proposal of gold becoming a teir one asset?   I see gold as a tangible asset myself and I prefer to invest in something tangible, I can hold in my hand.  I have for 35 years.


Thu, 09/27/2012 - 11:29 | 2835524 Thisson
Thisson's picture

It makes no sense to discuss gold in the same sentence as the bubble fiat currencies in Australia and Brazil, which are both dependent upon export to China, which in turn is dependent on the US ponzi finance system.

Thu, 09/27/2012 - 04:12 | 2834680 crito
crito's picture

As the soon-to-be nobel prize winner Omar Little said : "money ain't got no owners, only spenders".


Wed, 09/26/2012 - 18:30 | 2833871 news printer
news printer's picture

Yes it is ;)

Wed, 09/26/2012 - 18:31 | 2833872 Flakmeister
Flakmeister's picture

'fraid tis but a chimera.....

Wed, 09/26/2012 - 19:13 | 2833986 falak pema
falak pema's picture

"Chimera" : going rate for a woman of "quality" in the middle ages in Holy Land : 1 dinar gold per sollicitation. Silken chimera for gold...unless you were a Templar, then you stayed with your fold and "folded" them, so the story goes.

Wed, 09/26/2012 - 18:35 | 2833881 zerozulu
zerozulu's picture

Yes, but first  we need to do something about Tungsten.

Wed, 09/26/2012 - 18:36 | 2833885 Zap Powerz
Zap Powerz's picture

Lots and lots of stupid people that are nothing more than parasites will have to die before any return to any semblence of sanity occurs.

And the problem with lots and lots of stupid people dying is the fact that whatever it is that is killing them is pretty indiscriminant and also kills smart people.

Wed, 09/26/2012 - 18:43 | 2833906 cougar_w
cougar_w's picture

But what about smart people killing stupid people?

See, if you were rilly smart you would have figgured that out.

Wed, 09/26/2012 - 20:48 | 2834196 DosZap
DosZap's picture

But what about smart people killing stupid people?

See, if you were rilly smart you would have figgured that out.

Rule #1 in a uber fascist/communist regimes, is smart goes first..................pray your not REAL bright.

"Of Mice and Men" comes to mind.

Wed, 09/26/2012 - 22:19 | 2834358 SAT 800
SAT 800's picture

If you were smart you would have read history. It's always the stupid people who are available to be hired by the government to kill the "problem people".

Wed, 09/26/2012 - 20:37 | 2834179 DosZap
DosZap's picture

Lots and lots of stupid people that are nothing more than parasites will have to die before any return to any semblence of sanity occurs.

And the problem with lots and lots of stupid people dying is the fact that whatever it is that is killing them is pretty indiscriminant and also kills smart people.

Did you see the article where Russia refused corn form the USA, because it has been so screwed with genetically by the Big 3, it was found to be carcogenic.

So, they said Niet.No deal we don;t want your shite.

Wed, 09/26/2012 - 18:37 | 2833887 rustymason
rustymason's picture

The banksters will never voluntarily give up a system that allows them to create trillion$ out of thin air and then pocket a chunk of it with a few keystrokes. Yes, it is the culture that's responsible -- the culture of the pirates.

Wed, 09/26/2012 - 18:39 | 2833893 papaswamp
papaswamp's picture

You mean tungsten standard? The Chinese and Russians took all the gold.

Wed, 09/26/2012 - 18:40 | 2833895 zebra
zebra's picture

Edison would definitely love the tungsten standard, no more LED lamps!


Wed, 09/26/2012 - 18:40 | 2833894 Temporalist
Temporalist's picture

Found on

Strikes halt 39% of South Africa's gold production

"walkouts spread in the country amid demands for above-inflation pay increases."

Wed, 09/26/2012 - 18:41 | 2833899 Tyler Durden
Tyler Durden's picture

Also here

Wed, 09/26/2012 - 18:47 | 2833922 cougar_w
cougar_w's picture

above-inflation pay increases

I wonder why the copy editor felt compelled to make that distinction? Here in the US, wages have stagnated for so long that the average worker would probably need a 20% pay increase just to make up for the inflation since the '80s, never mind the hyperinflation that is headed our way due to QEn

Wed, 09/26/2012 - 19:08 | 2833977 falak pema
falak pema's picture

thank you Ronnie n Maggie...

Wed, 09/26/2012 - 19:17 | 2833995 cougar_w
cougar_w's picture

They did it to us for our own good, you can be sure.

Wed, 09/26/2012 - 19:52 | 2834077 cranky-old-geezer
cranky-old-geezer's picture



Here in the US, wages have stagnated for so long that the average worker would probably need a 20% pay increase just to make up for the inflation since the '80s.

They would need a 100% raise just to make up for inflation in the last 4 years.

Wed, 09/26/2012 - 20:35 | 2834174 RockyRacoon
RockyRacoon's picture

Hey, Geezer!  That pay increase would also require the continuation of pay increases ad infinitum.  Ponzis end badly.  I'm trying to figger out why there is any discussion of gold standards at all.  Until the wheels come off the entire jalopy, the debate is fruitless.  People will dig in at both camps and fire volleys across the void and desolate battlefield.  They won't come together and discuss the idea seriously until all the combatants have run out of ammo!  They'll step over the carcasses of dead economies strewn across no-mans-land and engage in some serious truce terms.  Then gold will shine.

Thu, 09/27/2012 - 03:05 | 2834589 cranky-old-geezer
cranky-old-geezer's picture




Gold (and silver of course) will come back to being money naturally after paper currency systems collapse ...and the governments using them collapse ...and the economies "managed" by those governments collapse.

Government collapse doesn't happen first.  Currency collapse happens first.  Then the government collapses, then the economy collapses, then society itself collapses.

Or maybe the economy collapses then the government collapses.  Either way it's pretty chaotic for the nation.

Imagine 200% inflation per year in America, then the rest of the world rejecting US dollars, then losing world reserve currency status, then collapsing as a currency, then the economy collapsing then the government collapsing. 

Thngs would be really chaotic in America.   Prices on things people need would be doubling every six months. 

People would be spending their paycheck fast as possible before those dollars lose more value, and they wouldn't be getting any raises to make up for rapidly debasing currency (they'd be lucky to still have a job). 

With no pay raises and rapidly rising prices they quickly reach a point where they can't make ends meet anymore, even with government assistance.  Urban areas break out in huge riots far beyond police's ability to contain it, every store with anything of value is looted, and society itself starts breaking down.

Truckers won't make deliveries thru rioting areas fearing for their own lives, availability of essential things (food, fuel, etc) dries up, and that's when urban war breaks out.  But it's not people against the government.  It's huge gangs going thru middle class neighborhoods looting, raping, and killing.

You're stocked up and armed?  Wonder how well you'll do when ten or twenty armed gang members show up at your house?  Call the cops?  They won't respond.  They'll be somewhere else trying to quell riots, if not baracaded up at the police station fearing for their lives.

If there's any police left.  They might be laid off after the city government bankrupted. 

Look at the bright side, you don't have to pay property taxes anymore, there's no city government anymore ...and no police and firefighters and garbage pickup anymore either.

Doesn't really matter, you and your family will be dead, your home a burned out hulk after that gang passes thru your neighborhood, certianly after a few gangs pass thru your neighborhood.  You might get lucky, fend off that first attack.  But more attacks will come, and they'll bring more people next time. 

Or they'll scope out your home and wait till you go to work ...assuming you still have a job.  And you'll be driving that nice late model vehicle thru riot areas on your way to work.  You might not even make it to work, or make it home in the evening ...back to your looted burned out home, wife and kids dead.

People don't think about the anarchy and urban warfare they'll have to go thru before currency collapse and economy collapse and government collapse and society collapse gives way to new government and natual money again.  Many of us won't live to see it. 

Thu, 09/27/2012 - 05:09 | 2834698 _underscore
_underscore's picture

Yeah OK... but what's the downside?

Fri, 09/28/2012 - 13:28 | 2839414 mkkby
mkkby's picture

Why don't you shut up with this doomsday crap?  I realize idiots think prophesies and mad max movies are true, but try thinking for yourself one time.

Are people slaughtering each other in greece, spain, italy, argentina or any other place where there was economic chaos?  No, they didn't.  And don't bother mentioning serbia -- you can find the real cause of that if you try.

Aw, never mind.  Sheeple never learn.

Fri, 09/28/2012 - 15:40 | 2839850 RockyRacoon
RockyRacoon's picture

Sounds like you are scared.   The Spain, Italy, Greece riots so far are just getting warmed up.  Come back when there are bodies in the streets -- or completely silent and vacant streets.

Wed, 09/26/2012 - 18:40 | 2833896 cougar_w
cougar_w's picture

Before we can try a gold-base monetary system we'll have a tungsten-based one.

Notice that it won't even matter.

Wed, 09/26/2012 - 18:44 | 2833911 Flakmeister
Flakmeister's picture

A voice of reason in the wilderness,,,

Wed, 09/26/2012 - 19:06 | 2833969 cougar_w
cougar_w's picture

And yet right away with the down-votes. In my experience a matter is no longer subject to intelligent adult discussion when people shout you down the moment you open your trap (in text or in person, about the same). I wonder sometimes why people get so wrapped up in this shit. It's just abstraction heaped on pretend. The value of anything is determine by the context and the times. Simples. I think what has happened is that a bunch of people started worrying that the future had suddenly become uncertain (can't have that) and subsequent to that realization have madly chased anything that stood a chance of preserving the past for them. Well hello everyone, the future will decide what and who has intrinsic value and what and who does not, just as it has for 8,000 years of human civilization.

Scary as hell I know. It would have been better simply to have not tempted fate like that. But we have gone and tempted it anyway and having sown our seed on the wind are set to reap the whirlwind. Gold or tungsten or crude oil or wampum beads or otherwise.

Wed, 09/26/2012 - 22:24 | 2834365 SAT 800
SAT 800's picture

meaningless rubbish attracts downvotes, also.

Thu, 09/27/2012 - 00:48 | 2834541 e_goldstein
e_goldstein's picture

Not as much as slaughtering sacred cows.

Wed, 09/26/2012 - 18:40 | 2833897 Sean7k
Sean7k's picture

We do not need a gold standard. We need to eliminate legal tender laws and allow the market to determine what is money.

This garbage is the continuing smoke screen provided by central bankers so they have an argument in favor of fiat. Take away the argument. 

Let anything be money as long as both parties accept it.

Legal tender laws are the first tools of tyranny.

Wed, 09/26/2012 - 19:07 | 2833976 F22
F22's picture

+1  Isn't that what the concept of "freegold" is meant to accomplish?  Rather than allowing the government to determine the price of gold--like previous gold standards-- the price of gold will continue to be market driven.  And, ultimately market-driven changes in the price of gold will force the government to deal with their economic realities.

Wed, 09/26/2012 - 19:21 | 2834007 iDealMeat
iDealMeat's picture

Having a hard time reading you with that Avatar F22...

Wed, 09/26/2012 - 22:16 | 2834352 Harbanger
Harbanger's picture

Flies are so easy to trap.  Focus on the big cock between the knees you think you see. 

Wed, 09/26/2012 - 19:30 | 2834031 centerline
centerline's picture

Definately good stuff to read over at FOFOA.

Wed, 09/26/2012 - 20:25 | 2834159 Sean7k
Sean7k's picture

Except you still have a paper money system and credit. These systems would probably be left in the hands of the banks or government. Freegold is a great idea. However, it is still a regimented system and unless you eliminate legal tender laws- it too can be used by people in power. 

Wed, 09/26/2012 - 19:58 | 2834089 Kasperfx
Kasperfx's picture

+ 1000

Wed, 09/26/2012 - 18:41 | 2833898 tuttisaluti
tuttisaluti's picture

first you have to decimate the world population, then it can work. I'm affraid we are on the best way to do so.

Wed, 09/26/2012 - 18:41 | 2833900 zerozulu
zerozulu's picture

"Most economists see the great problem of gold as twofold: 1) there is insufficient supply."

What a stupid argument. You price what you have. Insufficient supply is the reason why Gold is a wealth and standard.

Wed, 09/26/2012 - 18:54 | 2833937 dryam
dryam's picture

Put another way...

Exponentially inflating fiat is not compatitable with a finite supply of gold........or any other natural resource for that matter.  This is exactly why the world's financial system is spinning wildly out of control.  The debt-based money system is an exponential function requiring infinite expansion & the world's resources are not just finite, but are decreasing as time goes forward.  Something has to ultimately give with the diverging curves.

Wed, 09/26/2012 - 19:14 | 2833989 cougar_w
cougar_w's picture

The US dollar is priced in -- and back by -- the nuclear weapons standard.

You think about that a moment and a bunch of other things suddenly start to make a lot more sense.

Thu, 09/27/2012 - 00:41 | 2834536 bookwurm
bookwurm's picture

Thats right, we went form the Gold standard to the Plutonium standard...

Wed, 09/26/2012 - 22:29 | 2834371 SAT 800
SAT 800's picture

It's probably best understood as a rationalization; rather than a stupid argument. it supports their system.

Wed, 09/26/2012 - 18:42 | 2833904 blindman
blindman's picture

26 September 2012
Robert Johnson: Economists As Marketeers for the Monied Interests
Max Keiser and The artist taxi driver
Posted on September 26, 2012 by maxkeiser
that is all.

Wed, 09/26/2012 - 19:02 | 2833909 JustObserving
JustObserving's picture

Currently only about $4 trillion of gold bullion is available.  The money supply worldwide may be $65 trillion (one year's world GDP).  So gold prices will have to rise by a factor of 16 to $28,000 an ounce.  Silver will be $600 an ounce.

Central banksters will never allow their power to print be replaced by gold.  Besides, they have hundreds of trillions in unfunded liabilties.  A gold-backed currency would mean bankruptcy for virtually all western nations since they cannot print at will.  So a gold-backed currency will never happen voluntarily.

Wed, 09/26/2012 - 19:09 | 2833979 seek
seek's picture

Not sure your argument holds water (I didn't downvote you) because, while the gold-backed currency may or may not happen, the bankruptcy of virtually every western nation will.

That's when the door opens.

Honestly, I don't think we need a gold backed currency. All we need is gold, period, and free exchange (e.g. competiting currencies.)

At that point people can select what they want, and denominate their bank accounts in AU and pay in USD, yen, whatever.

Wed, 09/26/2012 - 19:22 | 2834011 cougar_w
cougar_w's picture

Your appeals to natural law and spontaneous order do not align with the Grand and Benevolent Central Plan for the Continual Perfection of Monetary Idiology, citizen.

Off to the re-education camp with you.

Wed, 09/26/2012 - 19:26 | 2834023 razorthin
razorthin's picture

Chances are pretty good that not every producer will bebase our Denarius.  But the goobermint surely would.

Wed, 09/26/2012 - 20:13 | 2834128 Jungle Jim
Jungle Jim's picture

Well, is there some way to make it happen involuntarily? Through, say, revolution?

Wed, 09/26/2012 - 20:44 | 2834191 DosZap
DosZap's picture

Central banksters will never allow their power to print be replaced by gold.

Sure they would, since they are hoarding the crap out of it now, and a EO call(complete w/ 10yrs min, and $250-$500k min fine in conjunction, would get many pussies to do it.

That way they retain power.

The New "SNAP".

Wed, 09/26/2012 - 18:47 | 2833915 IridiumRebel
IridiumRebel's picture

MarketWatch sucks, but the core subject bolsters even more positive sentiment for gold which is shitty sentiment for paper money. 


“Only $40 billion of MBS may not be enough,” agreed Paul Ashworth, chief U.S. economist at Capital Economics."


How much is enough then? Fuck it. Let's do a trillion a month. 

Wed, 09/26/2012 - 20:06 | 2834091 Mr. Fix
Mr. Fix's picture


I have been trying to return your Howdy to me for a couple of weeks now.

 Apparently, there is no way to send a personal message here on Zero Hedge.

 I spend a lot of time on a website called TF metals now,

 there is a link on the left side of this page,

 I sincerely hope that you stop by and say hi,

 I can't get into MarketWatch at all anymore.

(Banned for life, and I think they know my IP number.)

 You might find some more friends then me on Turd Fergusons site.

 Hope I see you there someday.


I have the same name and avatar there as always,

 if you sign up, I will find you, and say hi,

 if you look for me, it will be easy there.


 In the meantime, I hope you are well, and just keep stacking!

Wed, 09/26/2012 - 21:15 | 2834239 IridiumRebel
IridiumRebel's picture

I'll check it out Fix. It's great to see you here and I'll probably see you there.

Wed, 09/26/2012 - 22:35 | 2834363 Mr. Fix
Mr. Fix's picture

Looking foward to it!

At least we have mail boxes  there like on MW.

(If you change your name, you'll have to find me.)

Do NOT follow this link or you will be banned from the site!