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Chatham House: Gold Standard Impractical But Gold Hedge Against Declining Values of Key Fiat Currencies

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From GoldCore

Chatham House: Gold Standard Impractical But Gold Hedge Against Declining Values of Key Fiat Currencies

Gold’s London AM fix this morning was USD 1,774.75, EUR 1,321.48, and GBP 1,120.42 per ounce.

Yesterday's AM fix was USD 1,765.00, EUR 1,316.18, and GBP 1,113.28 per ounce.


Cross Currency Table – (Bloomberg)

Gold fell 0.3% in New York yesterday and closed at $1,766.80/oz. Gold gradually ticked higher in Asia rising to $1,777/oz prior to slight weakness in Europe which sees gold at $1,775/oz.

Gold’s slight gains come after two sessions of losses and may be due another massive ECB cash injection expected later this week and the weak dollar.

Today US consumer confidence figures hit the market at 15.00 GMT. A positive number should see gold weakness and a negative number should see safe haven buying.


Gold Spot $/oz 30 Days – (Bloomberg) 

Gold hit a 3 month high last week of $1,787.11 and appears to be consolidating above $1,750/oz. $1,800/oz is the key technical level which hasn’t broken yet, but we expect this will happen – possibly soon which could see gold quickly rise to $1,850/oz.

Central Bank Demand
The IMF managed to create much confusion yesterday by posting incorrect data regarding the Swedish central bank having bought nearly a $1 billion dollars worth of gold bullion or 18.3 tonnes.

The IMF subsequently confirmed they had made an error. But while all the focus was on the discrepancy between the Riksbank and the IMF, the more important development of continuing and significant central bank demand in January was lost.

Western central bank gold buying is likely to be seen in the coming months and years as western central banks realise the absolute folly of selling their gold reserves in recent years, including and especially the Bank of England, and begin to diversify their foreign exchange reserves by buying gold bullion again.

Silver’s Fundamentals
The gold-silver ratio has dropped to its lowest ratio in 4 months to just above 49, as silver has so far seen a 28% year to date rally versus gold’s 13% gain.  

Since 2003, we have said that the gold silver ratio will likely return to the geological gold silver ratio of around 15:1 due to the fact that a huge amount of silver has been used in industrial applications in the last 100 hundred years – making silver even more attractive than gold from a supply demand perspective.

Silver’s fundamentals remain even more compelling than gold’s. 

Chatham House: Gold Standard Impractical But Gold Hedge Against Declining Values of Key Fiat Currencies 
Gold’s use to back the value of the dollar would be impractical and there is little scope for the metal to play a more formal role in the international monetary system, the U.K.’s influential research institute Chatham House or the Royal Institute of International Affairs has said.

While a higher gold price may reflect a lack of confidence in key currencies and low returns on other assets, there’s no consistent correlation between bullion and economic variables that could be used to inform policy decision making, according to a task force that discussed possible roles for gold. 

The metal can be used to hedge against currency devaluation and other risks as part of a portfolio, but not on its own, it said.

“Reintroducing gold as an anchor would undoubtedly be impractical or even damaging, given bullion’s deflationary bias,” the task force, which held discussions over eight months, said in a report today. “Gold can serve as a hedge against declining values of key fiat currencies, and can also be useful for central banks looking to diversify their foreign reserves.”

While the gold standard may no longer exist, nations and international organizations still have 30,877 metric tons of bullion reserves, valued at about $1.77 trillion. 

The dollar has been the world’s reserve currency since the U.S. and allies agreed at the 1944 Bretton Woods conference to peg it to a rate of $35 per ounce of gold. It remained the most- traded legal tender after global currencies began freely floating in the early 1970s. The greenback dropped 12 percent against a basket of six major currencies since March 2009. The U.K. suspended the gold standard in 1931, Chatham House said.

“Greater discipline on financial markets might have been helpful in inhibiting the reckless banking and excessive debt accumulation of the past decade,” the task force said. “However, with the onset of the global crisis, had gold had a more formal role to play, the rigidity it imposes might also have been a handicap when a more flexible policy response was required.”

Including gold in the International Monetary Fund’s Special Drawing Rights system probably wouldn’t bring substantial benefits, and adding developing economies’ currencies to the basket would be more desirable, according to the task force. SDRs were created in 1969 and are an artificial currency that IMF members use to settle accounts with each other and can be converted into hard currencies.

Chatham House was founded in 1920 and is based in London. Members of the gold task force include Gerard Lyons, chief economist at Standard Chartered Plc, Meghnad Desai, professor emeritus of the London School of Economics and a member of Britain’s House of Lords, and Catherine Schenk, a professor of international economic history at the University of Glasgow.

“For gold to play a more formal role in the international monetary system, it would be imperative for it neither to hamper the system’s performance nor to create unacceptable constraints on national economic policies,” the task force said. 

Gold may “continue playing a significant role in the international monetary system, serving as a valuable hedge and safe haven, particularly in times when tail risks predominate.”

For breaking news and commentary on financial markets and gold, follow us on Twitter.

OTHER NEWS
(Bloomberg) -- Sweden’s Riksbank Says Gold Reserves Unchanged After IMF Error
Sweden’s central bank said its gold reserves were unchanged in January after the International Monetary Fund reported earlier the nation had added bullion valued at about $974 million.

The country’s holdings are unchanged at 125.7 metric tons, Joanna Gerwin, acting head of communication at the Riksbank, said by phone today. Data released earlier on the IMF’s website showing that reserves increased by 18.3 tons were incorrect and will be withdrawn, the IMF said in an e-mailed statement.

Central banks are expanding reserves for the first time in a generation as holdings in exchange-traded products jumped to an all-time high. They added 439.7 tons last year, the most in almost five decades, and may buy a similar amount in 2012, the London-based World Gold Council estimates. Gold climbed the past 11 years and reached a record $1,921.15 an ounce in September.

“Central banks, mostly from emerging countries, will continue diversifying their currency reserves,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “This means supply will be reduced further, thus supporting prices. Central banks from the emerging countries are mainly underinvested in gold.”

Belarus raised its gold reserves by 5 tons to 42.6 tons in January, Kazakhstan increased them by 7.6 tons to 89.6 tons and Turkey boosted them by 4.1 tons to 199.4 tons, according to the IMF. Mexico reduced bullion reserves by 0.1 ton to 105.9 tons and Tajikistan cut them by 0.3 ton to 4.4 tons, the data show.

(Bloomberg) -- IMF Says Sweden’s Gold Reserves Incorrectly Reported on Website
The International Monetary Fund said it incorrectly reported Sweden’s gold reserves on its website due to a data entry error.

The nation’s reserves were unchanged in January, Alistair Thomson, a spokesman for the IMF, said today in an e-mail.

(Bloomberg) -- Gold Prices to Keep Climbing on ‘Trend Chasing,’ Nadler Says
Gold prices may keep climbing as investors are “trend chasing,” Jon Nadler, an analyst at Kitco Inc. in Montreal, said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt.

Prices may climb to as high as $1,830 an ounce and have the potential to touch the record $1,923.70 reached in September, Nadler said.

Gold “is going up, because it’s going up,” Nadler said. “There’s absolutely lackluster physical demand. That worries me.” Still, investors may turn to the metal as “protection” amid economic turmoil, he said.

(Bloomberg) -- Gold-Silver Ratio Declines to Lowest Level Since November 1
The ratio of gold to silver dropped to the lowest level since Nov. 1, as investors sought to protect their wealth with holdings of a metal that may also benefit from economic growth. One ounce of gold bought as little as 49.8388 ounces of silver today. 

(Financial Times) -- NYSE Euronext launches gold and silver options 
NYSE Euronext's upstart US futures market has launched gold and silver options, the latest in a series of exchange moves to tap burgeoning  retail and hedge fund demand for metals trades.

SILVER 
Silver is trading at $35.55/oz, €26.46/oz and £22.44/oz. 

PLATINUM GROUP METALS 
Platinum is trading at $1,710.00/oz, palladium at $700.01/oz and rhodium at $1,475/oz. 

NEWS

(Bloomberg)
Gold Gains for First Time in Three Days as ETP Holdings Expand to Record

(FT)
NYSE Euronext launches gold and silver options

(BusinessWeek)
Gold's Use to Back Currency Is Impractical, Chatham House Says‎

(NDTV)
Gold inches up on weak dollar with eyes on ECB

(Business Week)
Commodity Investments May Increase by $40 Billion in 2012

COMMENTARY

(Chatham House)
Gold and the International Monetary System

(Zero Hedge)
The Post-2009 Northern & Western European Housing Bubble

(Zero Hedge)
Brodsky On Buffet On Gold

(Mish’s Global Economic Trend Analysis)
Capital Flight From Italy, Greece, Portugal Accelerates; Two Trillion Fantasy; Merkel Weaker Every Week; Crude and Geopolitical Risks

(True Economics)
Gurdgiev: Some interesting recent points on Gold

(Bloomberg)
Video:Europe to `Fall Apart' in 2012, Mauldin Says

 

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Tue, 02/28/2012 - 08:37 | 2203215 achmachat
achmachat's picture

basically it says: it would be the "right" thing to do.. but it's too much of a hassle, and we don't like change?!

Tue, 02/28/2012 - 08:56 | 2203252 BorisTheBlade
BorisTheBlade's picture

Not exactly:

“Greater discipline on financial markets might have been helpful in inhibiting the reckless banking and excessive debt accumulation of the past decade,” the task force said. “However, with the onset of the global crisis, had gold had a more formal role to play, the rigidity it imposes might also have been a handicap when a more flexible policy response was required.”

We can't print money without limitations because of this barbarous relic. So, we should continue printing, and you folks keep hoarding physical (If you can, haha).

Tue, 02/28/2012 - 09:06 | 2203275 masterinchancery
masterinchancery's picture

More plainly, "A gold standard would interfere with our flexible policy of robbing the middle class until there is nothing left."

Tue, 02/28/2012 - 10:20 | 2203560 bernorange
bernorange's picture

HR 1098 baby!

Tue, 02/28/2012 - 10:50 | 2203713 Harlequin001
Harlequin001's picture

'Gold may “continue playing a significant role in the international monetary system,' -nearly puked my beer at that one...

Tue, 02/28/2012 - 13:05 | 2203964 Pinto Currency
Pinto Currency's picture

 

 

Chatham House - How is it used?   

 

Chatham House, formally known as The Royal Institute of International Affairs,...

http://en.wikipedia.org/wiki/Chatham_House

----------

It is a little known memorandum, dated 21 June 1939, containing a total of 86 basic ground rules which the Royal Institute of International Affairs, who commissioned this enquiry into Broadcasting and Propaganda, considered would be of value to the planers of the embryomc Ministry of Information....

...Although there can be little doubt that Britain entered the Second World War relatively ill-eqnipped to conduct propaganda on anything like an efficient scale, historians have been too quick to devalue the considerable  progress made in this direction during the final year of peace. The improvements which took place in the planning after Munich, and especially after the German invasion of Prague six months later, were mainly due to the fact that, as war became increasingly likely, the nucleus of the Ministry of Information was finally permitted to recruit the services of interested experts and outside organisations such as Chatham House.

http://ics.leeds.ac.uk/papers/pmt/exhibits/2742/ToP.pdf

From: Techniques of Persuasion: basic ground rules of British propaganda during the Second World War

----------

and also...

The Guardian itself is a corporate-owned propaganda machine, a member of the unelected policy think-tank Chatham House [6], along side a myriad of other media, corporate, and financier interests that in reality shape our national and global destiny rather than the politicians we think we elect to represent us and our interests. Think-tanks like the Chatham House represent the collective interests and agenda of the world's most powerful elite. They are the literal architects and helping hands that propel the global elite's agenda forward, as clearly the Guardian is now in trying to rewrite the narrative regarding the 1o year ongoing "War on Terror" by whitewashing and elevating one of the war's most notorious terrorists by either giving him column space, or ghost writing a column in his name.

http://www.globalresearch.ca/index.php?context=va&aid=26839

Just a start. Lots of information on the web.

 

The key to taking away central control of our economies from a small elite (and thus remove control of our elected officials) is to have a monetary system that cannot be centrally controlled to create booms and crashes.  It would also be nice not to have a monetary system that facilitates fleecing of the populace.

 

 

 

Tue, 02/28/2012 - 15:02 | 2204900 CIABS
CIABS's picture

cheat 'em house, a.k.a. the city of london, former custodians of a lot of physical gold.

Tue, 02/28/2012 - 09:01 | 2203261 fourchan
fourchan's picture

its too heavy for crooks.

Tue, 02/28/2012 - 10:51 | 2203718 Harlequin001
Harlequin001's picture

When I read comments like this I can't help thinking that 'maybe we need more paper?

Tue, 02/28/2012 - 09:57 | 2203442 midtowng
midtowng's picture

There has to be one step done before instituting a gold standard: all this useless debt needs to be washed from the system.

There needs to be massive defaults and debt forgiveness before money is stabilized with something hard. Otherwise all this overhanging debt would crush the world economy.

Fortunately, that appears to be exactly where we are headed anyway.

Tue, 02/28/2012 - 08:37 | 2203217 The Swedish Chef
The Swedish Chef's picture

 “However, with the onset of the global crisis, had gold had a more formal role to play, the rigidity it imposes might also have been a handicap when a more flexible policy response was required.”

 

Well, isn´t rigidity the very idea? But as I read somewhere: governments introduce gold standards just so they can abolish them when ever they need too...

Tue, 02/28/2012 - 09:10 | 2203286 dwdollar
dwdollar's picture

If you put a government in charge of money they will discover the power of fiat sooner or later.

Tue, 02/28/2012 - 10:52 | 2203724 Harlequin001
Harlequin001's picture

Exactly...

Tue, 02/28/2012 - 08:41 | 2203218 spiral_eyes
spiral_eyes's picture

Gold is not supposed to be "practical". It's the only damn monetary instrument that isn't ripped to shreds by counter-party risk in the global fiat merry-go-round, though.

Also, this:

http://azizonomics.com/2012/02/25/price-stability/ 

Tue, 02/28/2012 - 08:47 | 2203225 Al Gorerhythm
Al Gorerhythm's picture

 

"Western central bank gold buying is likely to be seen in the coming months and years as western central banks realise the absolute folly of selling their gold reserves in recent years, including and especially the Bank of England, and begin to diversify their foreign exchange reserves by buying gold bullion again."

They're not diversifying, they're consolidating. Every currency will turn to gold. That's a consolidation. They sell gold to diversify, they sell various currencies to consolidate.

 

Tue, 02/28/2012 - 08:45 | 2203226 dildo o flaherty
dildo o flaherty's picture

Basically,what theyre saying is that gold will have to return sooner or later as the system is fucked big style,but they're still working out how to best cheat the ordinary 'bug' out of his hedge against their thieving.

Tue, 02/28/2012 - 09:10 | 2203269 Mitzibitzi
Mitzibitzi's picture

That's about my take on it, too.

Plus the readoption of even a relatively loose gold standard will be painful to swallow for the credit-addicted iPad generation, as it will tighten up the system a whole bunch. My bet is that we're going to get an introduction to the horrors of total global bankrupcy (and maybe a bit of war, just for flavour) for a while first. Then TPTB can turn around and say, "Well, this gold standard thing won't be like what we had before, but it's a whole shitload better than what we have now!" and there'll be a collective sigh of relief. For about 6 months, until your average man on the street works out that all the wealth is STILL in the hands of the same folks, cos they bought all the gold. Or rather he won't work that out, but will see the result of it, in that he can't borrow more money to get a new car, buy a house, or whatever, because his impressive sounding salary, that he has to work 60 hrs a week for, is entirely engaged in buying the basics of life, taxes and servicing existing debt.

Or the tin foil hat guys are right and we get WW-III, total global collapse and the Four Horsemen!

Tue, 02/28/2012 - 08:55 | 2203246 MsCreant
MsCreant's picture

Silver is acting quite oddly, just this moment. Defib, $35.98.

Tue, 02/28/2012 - 09:05 | 2203268 The Swedish Chef
The Swedish Chef's picture

Call an ambulance, Roubini is having a heartattack...

 

LTRO, bitchez!

Tue, 02/28/2012 - 09:15 | 2203295 The Swedish Chef
The Swedish Chef's picture

BOOM! $36!

Tue, 02/28/2012 - 11:51 | 2203995 MsCreant
MsCreant's picture

$36.42

BOOM, BOOM, BOOM!

Tue, 02/28/2012 - 09:30 | 2203335 Sean7k
Sean7k's picture

I'm wondering if it is a supply issue. They are having trouble sourcing at the comex and the demand has been incessant, with an actual delivery month starting. I would love to know why china has been so long in turning out the 2012 pandas. First expected in early december, they are now projected for march. Sprott went right to the miners for his follow-on offering and the US and Canada will need to import this year.

Bankers loathe to front paper?

Tue, 02/28/2012 - 08:58 | 2203256 apberusdisvet
apberusdisvet's picture

$50k/oz sounds about right, but not until the banksters have stolen/appropriated/"humanitarianly liberated" all they can lay their hands on.

Tue, 02/28/2012 - 12:33 | 2204222 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1  Banksters will do just as you describe.

But, we can all "follow in the footsteps of the Giants" and front-run 'em: Buy gold!

 

Tue, 02/28/2012 - 08:59 | 2203258 Al Gorerhythm
Al Gorerhythm's picture

Chatham House gold task force run by 3 economists who say that a gold standard would adversely affect their beloved system. Oh, boo hoo. Wankers.

Tue, 02/28/2012 - 09:06 | 2203276 fourchan
fourchan's picture

i just set up my own gold standard backed with more gold and silver.

Tue, 02/28/2012 - 12:33 | 2204227 DoChenRollingBearing
DoChenRollingBearing's picture

Be your own central bank!

Tue, 02/28/2012 - 09:03 | 2203263 Catullus
Catullus's picture

Ah, Catherine Schenk, globalist apologist for greater "integration" of the global regulatory monetary system.  They discredit gold while pushing for greater monetary integration.  Here's a sentence you'll never see in their books "Gold was the original international currency and required little to no regulation by governments to be accepted as a form of clearance for both regional and global trade.  Though many elaborate attempts have been made through the 20th and 21st centuries to replace it, there can be little doubt as to the simplicity of the gold standard.  Be it not for the crippling, irrational fear of "deflation", gold would again be integrated easily back into international trade and as a high quality traunche of collateral."

Tue, 02/28/2012 - 09:07 | 2203266 MFL8240
MFL8240's picture

 

“Greater discipline on financial markets might have been helpful in inhibiting the reckless banking and excessive debt accumulation of the past decade,” the task force said. “However, with the onset of the global crisis, had gold had a more formal role to play, the rigidity it imposes might also have been a handicap when a more flexible policy response was required.”

******  IF GOLD WOULD HAVE BEEN HELPFUL INHIBITING THE RECKLESS BANKING THAN, IF THERE WAS GOLD BACKED MONEY THERE WOULD NOT HAVE BEEN THE NEED FOR A MORE FLEXIBLE POLICY THE GLOBAL CRISIS WOULD NEVER HAVE COME ABOUT BECAUSE GOLD DOES NOT ALLOW THE GANGSTERS TO BLOW NEW BUBBLES EVER OTHER YEAR WITH FAKE INTEREST RATES HIGH LIQUIDITY OUT OF THIN AIR AND RECKLESS SPECULATION. THIS IS THE MOST BIZAR PASSAGE I HAVE READ IN YEARS. RID THIS PLANET OF CENTRAL BANKS AND CENTRAL PLANNING, THE ARE THE PROBLEM.

 

Tue, 02/28/2012 - 09:08 | 2203283 Mitzibitzi
Mitzibitzi's picture

Yeah bullshit, isn't it?

You could almost read it as, "If we'd been constrained by a gold standard, us theiving bastards wouldn't have had nearly so easy a time in raping the rest of you. But we'd still have managed it. And gold would have then been in the way of resetting the system ready for the next round of peasant rape. Fiat was quicker and easier for all involved!"

Tue, 02/28/2012 - 09:08 | 2203281 chubbar
chubbar's picture

I think he is saying "freegold". In other words, allow it to be a monetary instrument that floats against fiat dollars depending on how many are being printed. It allows savings without risk of devaluation through monetary inflation. Do away with capital gains taxes and let everyone save riskfree that wants too.

I realize this is a poor explanation of "Freegold". For a better explanation see http://fofoa.blogspot.com/

Tue, 02/28/2012 - 12:38 | 2204249 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1  FOFOA is the best outh there.

I agree 100%, it is impossible to explain "Freegold" in a 30 sec elevator conversation.

His latest column gave me an "Aha!" moment: When the BIG owners decide NOT to sell, the flow of gold will drop...  You may not even NEED the flood of new buyers to get the $55,000, although FOFOA writes that gold is more valuable as it becomes more widely held.

Tue, 02/28/2012 - 09:15 | 2203296 _underscore
_underscore's picture

The article is daft - it's entirely self-referential  Effectively it's saying a 'gold standard' of some kind isn't of use when the currency has been debased & debt levels are at unrepayable levels, because it doesn't allow you to debase (inflate) it further by creating more 'money' to repay it.

Circular logic.

 

What it does imply though, is that in a reset scenario it's entirely feasible, since then currency debasement can't really start & will be 'nipped in the bud' before it wreaks too much damage via unsustainable borrowing & credit creation.

Tue, 02/28/2012 - 09:16 | 2203300 PaperBear
PaperBear's picture

Translation: A gold standard would have stopped the system getting up to it's neck in s**t.

Response: Revalue gold higher in dollar terms.

Tue, 02/28/2012 - 09:22 | 2203310 PaperBear
PaperBear's picture

silver spiked up at 12.20 GMT and again at 13.20 GMT - from $35.60 to 36.05/oz ... WOOHOO, WOOHOO, WOOHOO.

Tue, 02/28/2012 - 09:22 | 2203314 Sean7k
Sean7k's picture

“For gold to play a more formal role in the international monetary system, it would be imperative for it neither to hamper the system’s performance nor to create unacceptable constraints on national economic policies,” the task force said. 

Which is, of course, the whole reason for having a gold standard. To diminish the destructive effects of bankers largess and government debt creation. These people are the reason economists have a bad name. Money needs to have a stable value. That is exactly what gold does. It is only deflationary when the money supply is being expanded beyond the value of production.

Tue, 02/28/2012 - 09:30 | 2203332 goldfish1
goldfish1's picture

Translate: We collectively are fukked, but we can always point to a quasi gold standard (since of course we are holding gold) as a quasi solution should the rubes figure us out. In the meantime, party on.

Tue, 02/28/2012 - 09:34 | 2203341 eddiebe
eddiebe's picture

Chatham house sound like a bunch of bankster shill assholes.

Tue, 02/28/2012 - 09:37 | 2203352 Debugas
Debugas's picture

it is true that no government is interested in imposing gold standard but it is up to the people (who are being robbed everyday through inflation) to impose de-facto gold standard and stick it to the governments

Tue, 02/28/2012 - 09:46 | 2203394 Chump
Chump's picture

Point well-taken, but how do you propose a western country do such a thing when the vast majority of westerners don't even have savings to speak of, much less any meaningful amount of PMs?

Tue, 02/28/2012 - 09:57 | 2203443 Sean7k
Sean7k's picture

Eliminate legal tender laws. Gresham's law will do the rest.

Tue, 02/28/2012 - 10:12 | 2203514 Chump
Chump's picture

But that would require a government action intended to undermine its own grip on the currency...

Tue, 02/28/2012 - 11:00 | 2203756 Sean7k
Sean7k's picture

Yes and no. The people can decide to trade in whatever means of exchange they want. You can even settle contracts with it. If enough people decide to use alternative currencies, there is nothing a government can do. All governments depend on the approval of the people to maintain order and law. 

Although people are required to accept FRN's and this could pose a problem if someone refused, if enough people say no, the government really has no choice in the matter.

Tue, 02/28/2012 - 13:12 | 2204408 Chump
Chump's picture

Thanks.

Tue, 02/28/2012 - 10:44 | 2203559 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

The dollar was legally defined as an amount of silver up until 1965.  We were not on a gold 'standard', we were on a silver 'standard'.  The eagle was the unit of measurement for gold and the dollar was for silver.  An Eagle coin was 'worth' or could be exchanged for ten silver dollars.  The amount of gold in the eagle coin could be varied and the coins reminted because of the relatively small amount of gold in circulation compared to silver.  The silver dollar stayed constant. That was the 'regulate the value thereof'. in the Constitution.  The 'coin money; part in the Constitution was taken care of by the public mints and assay offices.

This old book explains how it worked and explains the first legislative departure from that system.  You have to get it by inference because the book is complaining about them jacking with the coinage laws (in that day).  But it also explains how the original system worked.  It is so cool once you see how it worked.

  http://www.archive.org/details/coinsfinancialsc00harvrich

It was a very simple and subtil system that created prosperity and equity.  What they also need to do is reopen the public mints and assay offices and re-establish the coinage laws and a just standard of weights and measures.  In other words, they need to 'coin money and regulate the value thereof'.

That will draw the gold, silver, copper, and nickel specie out of valuts and warehouses and into circulation as specie.  Additional private bank credit or paper money can be established on top of that real 'capital' (or coin specie) with just banking laws.  This will put real wealth back into circulation as specie money or credit built upon real specie and allow people to pay their debts.  The more wealth you have in circulation, the more prosperity you have.

That will create prosperity again. Almost anything else will probably result in a return to the dark ages.

The people who started this county weren't dumb.  They had several hundred years of history to draw on for a monetary system and a clean slate to write on.  It would be amazing how quickly this nation would recover and our problems would be solved.

Money is the very lifeblood of society.   The better the money system, the better your society.  That is why people left their doors unlocked in the old days.  They had prosperity.  For the most part, even though there were poor people, they did not want for any thing and what they did need was alway taken care of by charity from the prosperous system.

 

Tue, 02/28/2012 - 09:43 | 2203381 Bartanist
Bartanist's picture

Just to state the obvious, but why would anyone give a dang about Chatham House? It is a relic maintained by zombies.

Tue, 02/28/2012 - 09:50 | 2203414 edmondantes
edmondantes's picture

Chatham House are the ultimate Illuminati thinktank, along with Council on Foreign Relations in the US... no surprise they don't like gold... and love global Imperial warmongering ... whenever thre is a foreign relations "humanitarian intervention" there is always a shill from the CFR or Chatham House available to strongly defend it and/or advocate more intervention... these serpents are everywhere...  

Tue, 02/28/2012 - 10:09 | 2203499 alfred b.
alfred b.'s picture

 

  Chatham House...cathouse...whorehouse....this bloated body serves up cake to bankster society and msm while it feeds crumbs to main street!

  They're a 'bot & paid for' banker groupie just like msm, and as always try to portray itself as middle-of-the-road idealist.

 

 

Tue, 02/28/2012 - 10:11 | 2203505 slackrabbit
slackrabbit's picture

Wow so Gold is a contraint...thats the point!

Tue, 02/28/2012 - 10:43 | 2203687 UP4Liberty
UP4Liberty's picture

“For gold to play a more formal role in the international monetary system, it would be imperative for it neither to hamper the system’s performance nor to create unacceptable constraints on national economic policies,” the task force said.

"...unacceptable constraints on national economic policies" - but you and I have to place constraints on how we allocate our meager resources on a minute by minute basis...sheesh.

Tue, 02/28/2012 - 10:50 | 2203712 New American Re...
New American Revolution's picture

Chatham House either doesn't understand a classical gold standard, or it is party to the "unprincipled men" who run the central banks of the world, but it is likely both.   Deflationary?   And what is wrong with that as long as real wages and weatlh are created, which is the general rule in a classical gold standard.   I will tell you the problem, deflation destroys the house of cards our financial markets have become and the insolvent big crime banks (2B2Fail) would have to go through a packaged bankruptcy and the worlds Kleptocratic ruling elite would have to work for a living.    And I think that would be ok with the 95%.   What do you think,... or are you thinking?

Tue, 02/28/2012 - 10:57 | 2203730 Bansters-in-my-...
Bansters-in-my- feces's picture

The Royal Institute of International Affairs,and the Chatam House are just a bunch of scum across the pond.

They are the twins of the Coucil on Foriegn Relations and the Trilateral Commission in the  USA ...Pure Fucking Poison.

Gold is their enemy.

Thats why they hold so much (the banks)

They even want to make gold a slave like they do us.

Fuck you's bankers.

Tue, 02/28/2012 - 11:04 | 2203772 Bansters-in-my-...
Bansters-in-my- feces's picture

IMF SDR's do have gold.......do they not.

The countries have to cough up gold to the IMF,so whwere does that go?

Tue, 02/28/2012 - 11:15 | 2203821 alfred b.
alfred b.'s picture

 

it's simple....those 20 ounces of gold are moved from block C to block F at the Federal Reserve in NY....assuming that they DO hold those ounces!

 

 

Tue, 02/28/2012 - 11:13 | 2203801 Bansters-in-my-...
Bansters-in-my- feces's picture

Nadler the Nerd says"there is absolutely lackluster demand" for physical Gold.

Thats a pretty big word (lackluster) to use for someone with no brain.

Ps....Fuck you's PPT with your ESF.

Tue, 02/28/2012 - 11:27 | 2203881 gwar5
gwar5's picture

Of course the UK would disparage gold, they don't have any.  These Chatham house idiots must be the same geniuses that advised Brown to sell at the Brown Bottom around $200/oz.

 

Tue, 02/28/2012 - 12:05 | 2204066 tony bonn
tony bonn's picture

"“However, with the onset of the global crisis, had gold had a more formal role to play, the rigidity it imposes might also have been a handicap when a more flexible policy response was required.”

not only is this statement complete and utter ignorance, it overlooks the point that the absence of a good gold standard (pre ww1) lead to the crisis in the first place...

allowing incompetently managed, insolvent companies go bankrupt is not rgidity or a handicap...flush away the shit and start afresh...

Tue, 02/28/2012 - 13:32 | 2204472 Alchemist1
Alchemist1's picture

Gold "pump and dump" in progress.. Price matters.. Gold is clearly in a bubble territory in many respects.  Like any classical bubble - the key ingredients are a good story and a lot of liquidity.  Just like internet stocks and housing (they dont make anymore land) gold is being driven by both.  "Security of gold" TV commercials trying to suck retail in is another sign.  Moms and pops are always the last ones in on the hot trend: they bought pets.com in 2000, miami condo in 2007 and will probably end up hi-ticking gold this year before the metal regiesers a first down year and reverses the trend

Tue, 02/28/2012 - 19:01 | 2206053 engineertheeconomy
engineertheeconomy's picture

FIAT CURRENCY IMPRACTICAL

there i fixed it for you

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