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What Is A Gold Standard?
Given our earlier discussion of Nobel winner Sargent's comments on Greece and the gold standard, and the ongoing melt-up in asset markets due to the 'limitless money-printing' of central banks around the world, we thought it worth a look at what a gold standard is (and is not). Before 1974, U.S. dollars were backed by gold. This meant that the federal government could not print more money than it could redeem for gold. While this constrained the federal government, it also provided citizens with a relatively stable purchasing power for goods and services. Today's paper currency has no intrinsic value.
It is not based on the value of gold or anything else. Under a gold standard, inflation was really limited. With floating value, or fiat, currency, however, some countries have seen inflation reach extremely high levels—sometimes enough to lead to economic collapse. Gold standards have historically provided more stable currencies with lower inflation than fiat currency. Professor Larry White asks, should the United States return to a gold standard?
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For those who like to dig it out:
Austrian School of Economics: The Gold Standard in Theory and Myth by Joseph Salerno
http://sufiy.blogspot.co.uk/2012/12/austrian-school-of-economics-gold.html#
A new "gold standard" is coming. Russia, China and a number of other countries are pushing for a new SDR but not the SDR that is currently used which is merely a basket of fiat currencies. They want the original SDR or Bancor (original concept by Keynes) -- which is based solely on a basket of thirty commodities (Gold being one of them but having a heavier weighting). Keynes also proposed that countries with a current account surplus pay a tax in Bancors and countries with current account deficits be given subsidies in Bancors. A gold based or silver/gold system would be better perhaps but the SDR/Bancor seems like a more workable system than we have now.
Watch the video...Drunken hack not fit to teach HS econ blathers classic Gold Bug nonsense. It's mildly amusing to imagine the half consumed bottle of cheap jug-wine off to the side of the camera view.
The gold standard malarky is the favorite magical fix of the anti-gubment lunatics.
Just remember, we had had a gold standard. Rome did too. The gold standard had not been a panacea then in Roman history nor in US history. Gold currency did not create a paradise under that standard...and massive, overwhelming poverty was the rule of the day under it. No amount of revisionism and manipulative "buy gold!" rhetoric will change the facts.
Finally - trying to settle a bet and I've found someone with the information I need, you. So tell me, what kind of underwear does Greenspan wear, and does Bernanke's cock really taste like gravy??
I'm not sure. Let me ask your mama.
People suck, and politicians suck worse than most people. So anything you can do to no rely on people or politicians is worth the effort.
I think a Human Flesh currency might make more sense. What's a pound of flesh worth these days, anyways?
China has not been buying all the gold it can, hand over fist, because they think it's pretty.
Once all the fiat currencies fall together, as they must, the world will cry out for some stability, a measuring stick to control the greed man cannot control. And here will come the Chinese with a gold-based solution. Gold will indeed become the last man standing, and everyone will beat a path to its door.
Bitcoin Rises Over $500 - Its Collapse Will Start The New Gold Leg Up
ZeroHedge reports another amazing development with Bitcoin. While Janet Yellen can not see "Any Bubbles Around" the cryptocurrency is in a parabolic rise and crossing $500 valuation now. Our take is that it is the classic Bubble Ponzi Scheme in the development now and the higher it goes the harder it will fall from the sky. It does not mean that you can not make money or that Bitcoin is bad, just be very careful comparing Tulips to Gold. Everybody who is cashing out their Bitcoins at these or higher levels can receive our congratulations. Everybody who is providing cash for this should be careful. We have all classic signs of the Bubble in Bitcoin growing very fast and its collapse will ignite another Bull Leg in Gold. Here where we take Bitcoin as the very serious and positive groundbreaking development in the modern financial history. Nothing less than that. The magnitude and speed of its appreciation are showing that this moment of the real FIAT currencies alternatives can be very close now. Bitcoin appreciation demonstrates in part the level of the real hunger for the alternatives to FIAT currencies now and how high Gold and Silver will go later oncethey can not be suppressed any more. Bitcoin has given to the Web generation the idea of the Gold 2.0 and it has exploited it with meme speed of going viral. Its collapse will leave all the driving factors - apart from the pure Buble ones like chasing new buyers buying only because it is going up - in place and exodus from the FIAT based monetary system will continue, but will find its way to the time proven Gold based standard. If you think that Bitcoin will go straight up to the sky and undermine all FIAT monetary system, please consider to make a research on its origins and how it could be manipulated as well. The simple act making its illegal with numerous real and fabricated concerns about its "limited amount" and "security" will do the trick at any time. We will throw a joke here as well: how can we be sure that it is not NSA with The FED - who are really behind it now? Who has the real picture of its full code and infrastructure? Who can guarantee that it is not compromised already or will not be in the future? Once we see the headlines that China is accepting US Treasuries redemption in Bitcoins, we will take our joke part out of this statement. Don't you think that it is too easy to get out from 17 Trillion of U.S. Debt?
And another curve ball to your consideration, with Gold and Silver subject to the ongoing FED's 100-year War and all manipulations, how can you be sure that Bitcoin is not manipulated already? What will be better for the undermined authorities than the success of Bitcoin which will Kill the idea itself? Just run it up to $2000 and crash it to $50 - you can put your own numbers here. Is it possible? We will see very soon. http://sufiy.blogspot.co.uk/2013/11/bitcoin-rises-over-500-its-collapse....
The introductory paragraphs are in error in suggesting that the printing of money prior to 1974 was limited by the total gold stock held by the Treasury. During the period 1944 - 1973, the Treasury's gold stock was used only to settle trade imbalances when trade-surplus countries demanded it. This was the period of the limited gold standard, used only to settle international accounts. The Fed issued Federal Reserve Notes when needed without reference to the gold stock. In the 50s and 60s, the Treasury also issued Silver Certificates and United States Notes. The former were backed by the silver stock, the latter only by the full faith and credit of the United States.