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Guest Post: A Gold Standard: Easier Said Than Done

Tyler Durden's picture





 

Submitted by Simon Black of Sovereign Man blog,

If you haven’t heard yet, the committee which is drafting the platform for next week’s US Republican National Convention has announced that they are including a proposal to return to the gold standard. Big news.

Ironic… given that it was a Republican president (Richard Nixon) who abolished the gold standard in the 1970s. Regardless, it’s nice to see the issue thrust into the spotlight. But does it stand a chance of actually becoming a reality?

Let’s look at some numbers.

Remember, a gold standard is a monetary system in which individual currency units are fixed to an amount of gold held by the government; under a gold standard, the paper money supply cannot be expanded without also increasing the amount of gold on hand.

With a full gold standard, 100% of the money supply is backed by gold. In practice, a smaller amount of gold may be fixed to back the money supply.

According to the World Gold Council, all the gold that has ever been mined in the world is now valued at roughly $10 trillion. This is essentially the same number as the current M2 money supply in the United States.

In other words, to fully back its existing money supply, the US government would have to control every ounce of gold that has ever been mined in the history of the world.

At present, the market value of the federal government’s gold holdings only amounts to about $250 billion. Now, I’m making a big assumption that Uncle Sam is accurately reporting his gold holdings. But we shouldn’t worry much about this, US gold holdings are going to be audited soon. By the Treasury Department. How impartial.

Anyhow, this $250 billion worth of gold bullion constitutes a mere 2.5% of US money supply. So advocating a return to the gold standard is much easier said than done.

Even under a flimsy, partial gold standard, the amount of gold backing the currency would certainly need to be north of 2.5%. Even if just 10%, this would suggest either:

(a) money supply would contract by 75%, spurring massive deflation [unlikely]

(b) the gold price increases to $5,000 [more palatable]

Clearly one of the key risks in this scenario is that the US government would need to acquire as much gold as they can get their hands on, likely through Roosewellian-style gold confiscation.

Let’s be honest, though. This talk of a return to the gold standard is probably just a pipe dream. The numbers don’t make sense. Besides, why would any politician want to be constrained from conjuring money out of thin air?

But just in case the idea gains momentum, it may be worth a speculation.

One could, for example, buy some options on long-dated futures; the call option to buy gold at $2,350 in December 2017 costs around $225 right now. Assuming that silver also rockets in price, one could pay ~$2 for an option to buy an ounce of silver in December 2016 with a strike price of $80.

If a return to the gold standard drives precious metals prices through the roof over the next five years, those options could be worth 20x what you pay today. If it ends up being nothing, your exposure is limited.

Naturally, there are a number of risks associated with making such speculations in public markets… not the least of which is the counterparty risk associated with the exchange itself.

I’ve long written that public markets are completely broken. Exchanges are just government lap dogs who make a sport of supporting fraud and fleecing the little guy.

If you have the means, you can reduce this risk by investing through foreign exchanges. Hong Kong’s exchange currently has a cash-settled gold futures contract (100 troy ounces of 995 gold priced in USD) and will eventually introduce options. Other global exchanges (Shanghai, Singapore, etc.) also transact gold futures.

Of course, nothing beats owning physical metal, preferably stored overseas. If Roosewellian-style gold confiscation becomes reality once again, the safest place for your gold is going to be a snug safety deposit box in a place like Hong Kong or Singapore.

 


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Fri, 08/24/2012 - 13:32 | Link to Comment 5880
5880's picture

Never going to happen

Fri, 08/24/2012 - 13:35 | Link to Comment tsx500
tsx500's picture

GET. PHYSICAL. IN. HANDS.

Fri, 08/24/2012 - 13:46 | Link to Comment Pladizow
Pladizow's picture

"History doesnt repeat, but it does rhyme" - Mark Twain

Regan tried this in the 80's  http://www.goldensextant.com/Resources%20PDF/Gold%20Commission%20Report%20Volume%20I.pdf

With regards to "confiscation" - In 1933 only one person (A NY Attorney) had his gold confiscated and that was 5000oz held at a bank!

Eveyone else willingly turned it in.

What are the chances of anyone willingly turning in their gold today?

Fri, 08/24/2012 - 13:51 | Link to Comment Precious
Precious's picture

"What gold, officer?"

Fri, 08/24/2012 - 13:56 | Link to Comment Surly Bear
Surly Bear's picture

I'll give you ironic...Obama is the new Nixon!

Fri, 08/24/2012 - 14:19 | Link to Comment strannick
strannick's picture

LBMA refusing to allow silver delivery out of LBMA system. This is big. This is the brave face of an LBMA default. Go to minute 18:56

http://www.silverdoctors.com/ned-naylor-leyland-gold-silver-parmanent-backwardation-omen-of-total-meltdown/

Fri, 08/24/2012 - 14:40 | Link to Comment Poor Grogman
Poor Grogman's picture

Th government Voluntarily Going to a gold standard would be like the "State" voluntarily turning up at the clinic for sterilization.

The only reason they would do it is if the alternative was worse.

Like losing reserve currency status perhaps....

Fri, 08/24/2012 - 14:51 | Link to Comment bernorange
bernorange's picture

HR 1098 is a rather simple solution to allow a defacto gold standard if the market wants it.

Fri, 08/24/2012 - 15:28 | Link to Comment Sean7k
Sean7k's picture

The simplest solution is the elimination of legal tender laws. Let the people/market decide what is money and what it's value is. Then let people pay taxes in fiat. This will work itself out in no time at all...

Fri, 08/24/2012 - 15:07 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

They know "someone" is about to introduce a gold-backed currency. 

"Someone" powerful enough militarily to prevent our military bullying them.

So yes, they know USD is about to lose WRC status.

There's no way they can come up with any sort of gold backing anyone would take seriously. 

How much gold do you need to "back" a $50 trillion money supply?

$50 trillion?   Yes.  $40 trillion of it is "off balance sheet".

But implement any sort of gold backing for a $10 trillion money supply, and the whole $50 trillion comes flooding back to the Fed, people wanting gold, and the truth comes out, it's really $50 trillon.

What does that do the dollar?  

"Currency collapse" comes to mind.

 

Fri, 08/24/2012 - 15:20 | Link to Comment Freegolder
Freegolder's picture

No one is thinking of a new gold standard.

 

The Euro has demonetised gold, it's just a reserve asset now.

 

Central banks are buying it because it is pure wealth, paid in full, and we should do the same.

 

Free floating physical gold is needed to free savers from the crappy fiat.

 

So, no gold standard, rather freegold awaits, thanks to the Euro architects (and natural evolution).

 

 

Fri, 08/24/2012 - 17:15 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

There's plenty of people who don't give a fuck about the Euro "demonetizing gold".  They can shove their Euro up their ass.  Nobody fucking cares.

Yes, "somebody" is gonna introduce a gold-backed currency.  Won't be long now.

Fri, 08/24/2012 - 19:48 | Link to Comment Poor Grogman
Poor Grogman's picture

And it won't be the euro tards either

Fri, 08/24/2012 - 13:57 | Link to Comment gmrpeabody
gmrpeabody's picture

Well...,you see, I was boating and......

Fri, 08/24/2012 - 14:09 | Link to Comment MachoMan
MachoMan's picture

My guess is they've already siphoned an incredible amount of it via the cash for gold meme...  I can't fathom granny has any gold left after all the progeny have sold it for pennies on the dollar over the years...  the rest of middle america is just trying to scrape by with gold largely already being cost prohibitive, despite availability of fractional ounces.

Sat, 08/25/2012 - 07:49 | Link to Comment goldfish1
goldfish1's picture

Why would anyone give these liars any credibility?

 

Fri, 08/24/2012 - 14:14 | Link to Comment Pemaquid
Pemaquid's picture

I read somewhere that only 30% of the gold was turned in. Anyone have a definitive percentage?

Fri, 08/24/2012 - 16:05 | Link to Comment XitSam
XitSam's picture

A significant percentage was overseas in 1933, I don't know off-hand how much.  Only the domestic holdings were confiscated of course.

Fri, 08/24/2012 - 13:48 | Link to Comment Darth..Putter
Darth..Putter's picture

The Gold Standard is very-easily done. 

 

When CONFIDENCE in any piece of paper or promise goes to zero, then all you have left is hard assets. The confidence in the paper is going down the tubes with every non-prosecution, as that is the confidence in law. 

 

The hidden soup-lines (food voucher system) is filled with people who are watching the inflationary policies with rapt attention.  Every week the see less and less of the promise of government to care. 

 

There is a tipping point at which beer, bread, milk, gas, electricity or water will not be delivered.  At least not for another piece of paper. 

 

When the price of toilet paper costs more than the Federal Reserve Note per wipe, you will know.

 

IN hand precious metals is the easiest answer today. 

Fri, 08/24/2012 - 14:12 | Link to Comment Precious
Precious's picture

Regulators would probably mandate it contain 1% flouride.

Fri, 08/24/2012 - 13:42 | Link to Comment ACP
ACP's picture

Exactly, it never will. But, if more people think of gold as what it actually is - currency - it won't matter, pragmatically speaking.

Just think of the US having 2 currencies...1) gold, tangible value vessel and 2) unconnected dollar, used solely to buy shit.

Fri, 08/24/2012 - 14:00 | Link to Comment DCFusor
DCFusor's picture

Agree it's not going to happen, unless....

Hasn't it occurred to anyone that you can still do fractional reserve, and count on the fact that never will everyone turn in 100% (or even much over a few percent) of their fiat to get gold from the government? 

They can screw this up just like they do current FRNs, it's just as easy.

And remember, most money isn't even paper, it's bits.  Probably couldn't turn that in for gold anyway, the bits don't have "gold certificate" stamped on them.

Fri, 08/24/2012 - 14:05 | Link to Comment HardAssets
HardAssets's picture

It may very well happen (how soon, who knows) ?  It would not come about because of 'party platforms' spouted by politicians. Does anybody pay attention to what they say now ? Romney who said he wouldnt go along with an audit of the Fed, will now support a gold standard ?  People are really that naive to believe these demorepublicrat liars & theives ?

A gold standard might come about as a result of the markets, if there was a complete loss of faith in the dollar. Sovereign nations are buying gold now for a reason. China may back the yuan with gold someday.

But, of course the pricing of dollars in terms of gold would have to be adjusted. When something is made near valueless, how much is it worth in terms of something in demand that people value highly (for thousands of years) ?  The author still seems to think in dollar terms to some degree.

 

Fri, 08/24/2012 - 15:19 | Link to Comment lightning
lightning's picture

Your post made me think about something that is connected indirectly.  You said, "It would not come about because of 'party platforms' spouted by politicians.  ...Romney who said he wouldn't go along with an audit of the Fed, will now support a gold standard?"  What if this is a political gambit to gain the libertarian/Ron Paul voter?  As you noted this is a change for Romney and one wouldn't think he would be saying this given his head financial advisor and/or his past behavior/statements.  I am beginning to wonder if he might have a big speech about this at the convention in an attempt to pull the libertarian/Ron Paul voters to vote for him.  These people won't vote for him, but I'm betting he is going to make a play for their votes via this subject anyway.

Fri, 08/24/2012 - 16:11 | Link to Comment n8dawg84
n8dawg84's picture

lightning,

My father told me this morning about a Drudge article stating Repubs. are thinking about returning to the gold standard (though I had already read the ZH article about truth/red herring).  I told him the same thing you are thinking now.  It's an attempt to reach out to the Ron Paul voters.  Romney's/Obama's backers don't want a gold standard, therefore one will not come until it is forced upon them.  I'm still writing in Ron Paul

Fri, 08/24/2012 - 15:38 | Link to Comment e-man
e-man's picture

1. A return to the gold standard would prevent the government from borrowing and spending beyond its means, thereby insuring the value of people's savings.

2. The government will not willingly return to a gold standard because that would prevent the government from borrowing and spending beyond its means, thereby insuring the value of people's savings.

Fri, 08/24/2012 - 16:21 | Link to Comment Peter Pan
Peter Pan's picture

The first step to any sort of gold standard is for manipulation of the price of gold to stop. Without this first step there will be no end to monetary madness.

Fri, 08/24/2012 - 14:19 | Link to Comment sodbuster
sodbuster's picture

>Anyhow, this $250 billion worth of gold bullion constitutes a mere 2.5% of US money supply.<

That's a better guarantee than the FDIC isn't it?LOL

Fri, 08/24/2012 - 16:28 | Link to Comment zerozulu
zerozulu's picture

It will happen the day when Iran goes nuclear and declare how much gold will it accept for a barrel of oil.

Fri, 08/24/2012 - 13:45 | Link to Comment Abraxas
Abraxas's picture

BB: "Gold is not money (pause)... it's an asset." FYB!

Fri, 08/24/2012 - 13:38 | Link to Comment Manthong
Manthong's picture

"In other words, to fully back its existing money supply, the US government would have to control every ounce of gold that has ever been mined in the history of the world."

Well, we have a head start at the FRBNY and we could keep all those carriers pretty busy getting the rest.

Fri, 08/24/2012 - 13:37 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Never said it would be easy. In fact I'm certain doing so would break several bankers' eggs when we whip up the new hard money omelette. All the more reason to start now.

Git er done.

How to cook an omelette.

Fri, 08/24/2012 - 13:41 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Banker's don't like it that's for sure

Bankster Reaction to a Return to the Gold Standard

Fri, 08/24/2012 - 14:49 | Link to Comment SubjectivObject
SubjectivObject's picture

I'm confused about when bankers do tell the truth.  Disinfo seems more their modus operandi than bonafideinfo (it is CNBC, after all). 

Fri, 08/24/2012 - 13:35 | Link to Comment fonzannoon
fonzannoon's picture

How about they keep boosting inflationary pressures into the real economy and keep wages stagnant? This way as people go broke they slowly have to cough up their precious metals and other valuables like what is happening in Portugal? I guess the key is to hang on for as long as you can.

Fri, 08/24/2012 - 14:10 | Link to Comment KK Tipton
KK Tipton's picture

"How about they keep boosting inflationary pressures into the real economy and keep wages stagnant? This way as people go broke they slowly have to cough up their precious metals and other valuables like what is happening in Portugal? I guess the key is to hang on for as long as you can."

 

Ding Ding Ding. Winner.

This is, and has always been the "bankers" plan.

What do you think Bilderberg discussions/meetings are all about?
Why are heads of corporations invited?

To make sure they are all on the same page.
Banality of evil situation right there.

Fri, 08/24/2012 - 15:23 | Link to Comment lightning
lightning's picture

Best defense against this is the barter system.  There is a barter system just about anywhere.  Craigslist tends to be the best way to connect and people are already bartering labor for goods.  I truly believe that the bankers have screwed themselves to a certain degree.  Their criminality is soooo apparent right now that before people give up anything of major value, I truly think they will hit the barter system first.  The sheeple may be lazy regarding changing the system, but I know many who do stuff just to poke TPTB in the eye.

Fri, 08/24/2012 - 14:14 | Link to Comment MachoMan
MachoMan's picture

seems as though this has been happening for years with the cash for gold craze...

Fri, 08/24/2012 - 14:17 | Link to Comment fonzannoon
fonzannoon's picture

Anyone see the south park cash for gold episode? Tremendous.

Fri, 08/24/2012 - 13:37 | Link to Comment buzzsaw99
buzzsaw99's picture

a gold standard + huge trade deficit = the usa has zero gold within a few short years

Fri, 08/24/2012 - 13:41 | Link to Comment lemonobrien
lemonobrien's picture

this is why its a scam. the USA is ripping off the world big time; and really only allowed to do it b/c of the military. We're the new nazis.

Fri, 08/24/2012 - 13:50 | Link to Comment Kitler
Kitler's picture

We are all Nazis now!

(Except us Kazis of course)

Fri, 08/24/2012 - 15:28 | Link to Comment gdogus erectus
gdogus erectus's picture

Yes yes. Good point. Kinda like what happened in the 70s. Guess we can go on the gold standard after we have a balanced budget and no trade deficit. I'll be holding my breath over here.

Otoh, think how easy it will be to do just that after the collapse!

Fri, 08/24/2012 - 13:38 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Invest in futures? Is this guy on drugs? LOL...

Fri, 08/24/2012 - 13:39 | Link to Comment Abraxas
Abraxas's picture

more like cheap glue

Fri, 08/24/2012 - 13:50 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

To be fair, he mentioned speculating by buying  futures "options" which he perceived as having minimum downside risk (you could lose only the premium you paid) and large upside potential (underlying futures price supesedes your call option strike price) putting the buyer "in the money".

Tuco

Fri, 08/24/2012 - 13:38 | Link to Comment cougar_w
cougar_w's picture

I said this exact same thing yesterday on ZH the moment I heard there was talk of a gold-standard.

It's not likely to happen (nobody in TPTB really want it) but if it did it would NOT be a good thing for anyone holding physical gold. The UST is on record as still holding gold at $42 Troy ounce, and now you can see why they never bothered changing that. That is what they are going to pay when you step up to "sell" (that is surrender) your gold.

The only reason they would do this is to shore up the TBTF banks with hard collateral. And I wouldn't put it past them.

Fri, 08/24/2012 - 13:45 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

They ain't gonna back much fiat at $42 an ounce.

Just sayin'

Fri, 08/24/2012 - 13:54 | Link to Comment dwdollar
dwdollar's picture

You're gonna trust the current leadership (who got us into this mess) with gold? Hah!

IF, they do try a gold standard it will be something like this...

They'll take it for $42. Then when they have it all, they'll create the new ratio at $5000 and it'll be increased every year. So basically, it will be a big rip-off that isn't even a true standard. Just more Orwellian Newspeak.

Fri, 08/24/2012 - 14:17 | Link to Comment MachoMan
MachoMan's picture

how does that pass muster under the constitutional requirement that fair market value be offered for any government taking?  seems like something a simple jury trial could fix...  the fact that it keeps the value of its assets on its books at a price less than their fair market value has nothing to do with the value of the gold...

Fri, 08/24/2012 - 14:30 | Link to Comment Sean7k
Sean7k's picture

Costitutional requirement? Really? Justice system? Stop it, you're killin' me!

Roosevelt, the fascist, paid out at 22$ an ounce and then immediately "revalued" the gold at 32$ an ounce. Assuring a huge profit for all the bankers that held gold internationally- especially our good masters- Britain. The law is the state and the state interprets the law- just ask Dred Scott or any of the other abortions we call SCOTUS rulings.

Fri, 08/24/2012 - 16:54 | Link to Comment Marco
Marco's picture

Global trade was a small part of the economy ... unless they were willing to move to the US the fact that gold was revalued in dollars didn't buy those foreign gold owners all that much.

Fri, 08/24/2012 - 20:13 | Link to Comment Sean7k
Sean7k's picture

The banks of england, france and germany did just fine. Try to pay attention. Especially as so many goods were purchased from America and most european economies were debt burdened from WWI.

Fri, 08/24/2012 - 15:16 | Link to Comment blunderdog
blunderdog's picture

  constitutional requirement that fair market value

I'm pretty sure the text says "fair value," and NOT "fair market value."

World of difference.

I think the US gummit still values gold at $42/oz.

Fri, 08/24/2012 - 17:53 | Link to Comment twh99
twh99's picture

Provided of course you keep your gold physical in the US.

If you use one of the services like Goldmoney, etc. your gold is kept secure in the country of your choice (Britain, Switzerland, Germany).

Fri, 08/24/2012 - 13:39 | Link to Comment akak
akak's picture

This is nothing but desperate grasping by the Romney camp to suck in Ron Paul voters.

Romney, you are as transparent as you are unprincipled.

Fri, 08/24/2012 - 13:45 | Link to Comment malikai
malikai's picture

+1000.

Sux being able to see through their charade, really. I can almost remember feeling good about presidents back when I was still a sheep. So long ago.

Fri, 08/24/2012 - 14:23 | Link to Comment machineh
machineh's picture

This gold standard chitchat is sucker bait to attract gold owners and libertarians with the fantasy that the Reps are somehow a pro-gold standard, small gov't party. 

Nothing could be further from the truth. They will hand-pick a committee to bury the idea, in the time-honored 'bipartisan' fashion.

Romney's military build-up can't be done without EZ-Money Federal Reserve ZIRP financing. That's what his plutocrat sponsors demand.

DON'T FALL FOR THIS SCAM. These sociopaths will happily collect your vote, then throw you away like a used Dixie cup.

Sat, 08/25/2012 - 13:42 | Link to Comment steve from virginia
steve from virginia's picture

 

 

Seems that any dumb article @ ZH is from 'Sovereign Man' whoever that is. Better to have Ronald McDonald to write articles, Tyler.

 

So dumb and in so many ways it's hard to start. First of all, the GOP has no desire for hard currency. Ron Paul likes it ... see the curb where he was kicked, the bus he was thrown under.

 

W/ $55 trillions in US public/private debt any hard currency would cause instant default OR banking collapse. The only way to install an official hard-currency regime is for the government to offer greenbacks, not borrow ... oops, there go the banks! (To the same curb/bus as Ron Paul.)

 

We have an unofficial hard currency regime right now as money is priced in crude oil by the public at the gas pump. Problems with it include the ongoing deflationary bankruptcies of Europe, Japan and China. Be careful of what you wish for!

 

Hard currencies are useful for artisan-craft workshop economies where firms need to borrow infrequently or not at all. Currency arbitrage is a killer w/ gold standards, it did in specie prior to 1934 and killed Bretton-Woods/Treasury gold window.

 

Gold and computer trading don't mix. When the 17th-19th centuries re-appear after current system breaks down (soon) then we can talk gold ... if any of us are left alive, that is.

 

(Not kidding.)

Fri, 08/24/2012 - 14:23 | Link to Comment kito
kito's picture

yes akak, agree fully, but the fact that romney is doing this leads me to believe ron paul is working on some arrangement with romney behind the scenes..romney wouldnt be doing this if there wasnt some pending quasi endorsement by paul....and that is what scares me............rand has already gone to the dark side, i certainly hope ron isnt slipping into bed with them.............

Fri, 08/24/2012 - 15:28 | Link to Comment monad
monad's picture

Rmoney. Fixed it for ya.

Fri, 08/24/2012 - 13:40 | Link to Comment dwdollar
dwdollar's picture

(a) money supply would contract by 75%, spurring massive deflation [unlikely]

(b) the gold price increases to $5,000 [more palatable]

In other words... Not gonna happen.

Fri, 08/24/2012 - 13:42 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"If Roosewellian-style gold confiscation becomes reality once again, the safest place for your gold is going to be a snug safety deposit box in a place like Hong Kong or Singapore."

 

Ha!  Ha!  Keep it cool, dry and nearby you idiot!  Maintain proper lead:gold ratio!

 

Tuco

Fri, 08/24/2012 - 13:40 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Aaaand won't ever happen.

Sorry to divert, but here's some raw meat for goldbugs - Jiffy Jeff Christian making an $1100-by--August call back in June. 

http://www.silverdoctors.com/cpms-jeff-christian-attempts-to-explain-fri...

AAaand the cocksuckery never ends.

Fri, 08/24/2012 - 13:51 | Link to Comment akak
akak's picture

I have to presume that Jeff Christian and Jon Nadler are in a long-running contest to see which can bend over the most and take it the deepest for the central banksters, most of all for Ben Bernanke.

I think Jon Nadler is winning, by a head.

Fri, 08/24/2012 - 13:43 | Link to Comment toady
toady's picture

They can have my gold when they pry it from my cold, dead hand.

Sat, 08/25/2012 - 02:25 | Link to Comment IrritableBowels
IrritableBowels's picture

What happened to the other one?

Fri, 08/24/2012 - 13:43 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I'm surprised SB didn't mention how Uruguayan natives on his plantation use gold to milk their llamas.

Fri, 08/24/2012 - 13:50 | Link to Comment Pladizow
Pladizow's picture

No one is that boastful!

Fri, 08/24/2012 - 15:26 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Authentic Tibetan Llamas, at that.

Fri, 08/24/2012 - 13:44 | Link to Comment forwardho
forwardho's picture

Go long food, post collapse... the "new" Gold. (and yes, you can eat it)

Fri, 08/24/2012 - 13:45 | Link to Comment Mylegacy
Mylegacy's picture

OK - now we have money printed by all and sundry and worth - well at least the paper it's printed on.

The world has a finite amount of Gold - there are 7 billion of us (give or take a few in Alabama that couldn't read the census form) in 100 years there will be 14 billion people and there still be the same amount of gold - SO - obviously, politicans will have to "decide" when and by how much to devalue the "currency" as the population increases. SO - it's really just a useless yellow metal being manipulated by "enlightened" politicans instead of a useless pretty green piece of paper.

Tulips centuries ago in Holland and Gold today - humans and their foibles.

Fri, 08/24/2012 - 13:51 | Link to Comment Pladizow
Pladizow's picture

Your legacy = STUPIDITY!

Fri, 08/24/2012 - 14:29 | Link to Comment Mylegacy
Mylegacy's picture

Pladizow, you are too kind.

just as a matter of interest - whcih of my former wives have you been conversing with?

Fri, 08/24/2012 - 15:40 | Link to Comment Pladizow
Pladizow's picture

Your stupidity has lead you to select a poor pool for me to survey, for which of your formr wives would claim otherwise?

Fri, 08/24/2012 - 14:37 | Link to Comment Sean7k
Sean7k's picture

He may not be stupid, just incredibly ignorant about the subject. Let's give him the benefit of the doubt. 

Legacy, you could start with FOFOA.blog as an introduction. Murray Rothbard has a book on the gold standard that is easy to read and understand. Go to Mises.org. 

If you knew anything about the history of tulips, you would have never made that comment. There are books on that topic as well.

Fri, 08/24/2012 - 15:46 | Link to Comment monad
monad's picture

Afaik Ron Paul's books are the most rational argument for a presidential candidate ever presented. In End The Fed He presents a gold standard as a mechanism to control fraudulent currency manipulation. He doesn't fixate on gold, as he is interested in a lasting solution, not the mechanism. Austrians propose using multiple imperishable resources as the basis for wealth reserve value: gold, silver, platinum, copper, diamonds, oil, etc. to keep control of money policy out of the hands of a few well organized criminals. Looking through my best friend's coin collection, I see that the British & the founders were on the same page.

Lead: the poor man's PM

Fri, 08/24/2012 - 19:10 | Link to Comment BigJim
BigJim's picture

  ...in 100 years there will be 14 billion people and there still be the same amount of gold..

...Tulips centuries ago in Holland and Gold today...

Are you genuinely that stupid, that you can equate tulips (whose supply is theoretically practically infinite) and gold (whose supply - at least according to you  - is fixed)?

The morons are out tonight.... it's talk of the gold standard that does it, like a full moon brings out the crazies.

 

 

Fri, 08/24/2012 - 13:49 | Link to Comment FranSix
FranSix's picture

I don't know if anyone noticed, but gold price sell-offs in aggregate conjure up money 'out of thin air.'  Selling something into the market which you first do not own and buying it back at a lower price is the way markets work.  

It shouldn't be very far fetched, though, that bullion markets take up the role of money markets in the absence of a functioning exchange due to negative nominal rates.  Not that something like that will conjure up money, but can soak up an indefinite amount of liquidity under the circumstances.

And the gold price can fluctuate to meet demand without any need to fix the price, but mostly people will be priced out of markets, or very few will be left holding any bullion.

Fri, 08/24/2012 - 14:47 | Link to Comment Tirpitz
Tirpitz's picture

"Selling something into the market which you first do not own and buying it back at a lower price is the way markets work."

At least as long as the buyer of the metal isn't intent on keeping the goods he purchased in good faith... Physical silver shortage anyone?

Fri, 08/24/2012 - 13:51 | Link to Comment Dungeness
Dungeness's picture

I think they could have something else in mind.

Instead of pegging the dollar to gold, they will peg the price of gold to the dollar.

In other words, the price of gold will be fixed, say $1600 or $1700 per ounce and then that will be that. It won't be allowed to go up or down. The GLD, IAU and other perhaps new manipulation schemes will be used to force this price for gold. It will be mandated by law. The price of gold will never change again.

Then, as inflation continues and the value of the dollar continues to fall, so will gold.

A different sort of gold standard?

Fri, 08/24/2012 - 13:52 | Link to Comment Pladizow
Pladizow's picture

Heard of a "Black Market."?

Fri, 08/24/2012 - 15:12 | Link to Comment debtor of last ...
debtor of last resort's picture

No. But the herd has.

Fri, 08/24/2012 - 13:56 | Link to Comment Abraxas
Abraxas's picture

That is where the black market takes over. Officially it's $1600/oz, on the street it's $5000+

edit: Pladizow beat me to it

Fri, 08/24/2012 - 14:16 | Link to Comment FranSix
FranSix's picture

Even though the price of gold was fixed to $35/oz. in 1935, gold miners continued to aggressively market their bullion product and the price rose to $41.32/oz. temporarily.  Black market prices are very temporary and will not move the bullion markets, especially if the bullion price is openly traded in volume as they are now.

If the price fix of gold is inadequate in times of high monetary inflation, you can get a massive deflation.

Bernanke is not in favour of a price fix.  

Fri, 08/24/2012 - 14:59 | Link to Comment ejmoosa
ejmoosa's picture

Damn they should have done this with the illegal drug trade.  Then there would have been no profit motives and then we would not have any illegal drug problems, right?

Fri, 08/24/2012 - 13:52 | Link to Comment optimator
optimator's picture

To avoid that paper buck going to zero they may try backing each buck with 5% gold.

Fri, 08/24/2012 - 15:23 | Link to Comment FeralSerf
FeralSerf's picture

Legal tender laws keep the paper buck from going all the way to zero.  They can be revised to prohibit, i.e. make it unlawful, for gold to be used as currency.  That, of course, won't stop gold from being used as money, but it will discourage it if your home is being sold on the courthouse steps for Fix It Again Tonys.

Fri, 08/24/2012 - 13:53 | Link to Comment fonzannoon
fonzannoon's picture

bernanke slaughtering a new set of shorts this week. he will keep blowtorching them until they learn

Fri, 08/24/2012 - 14:09 | Link to Comment kito
kito's picture

i just bought my shorts.....70% percent off end of summer clearance sale.....always better to buy shorts at the end of the summer when the latest fall fashions adorn the store windows.........and no, bernanke hasnt touched my shorts............

Fri, 08/24/2012 - 14:43 | Link to Comment Tirpitz
Tirpitz's picture

Mate, watch out for Uncle Sam's hand, right in your back pocket.

Fri, 08/24/2012 - 13:54 | Link to Comment catch edge ghost
catch edge ghost's picture

Speaking of standards.  I used to visit this site and see ads for hookers looking for "Established Men", now the hooker ads say "Broke Chicks Do It Better."

Not complaining. It's true afterall. And I like alternative economic indicators. Guessing my cookies are telling tales about me.

Fri, 08/24/2012 - 14:42 | Link to Comment Tirpitz
Tirpitz's picture

Strange. I only get ads about yachts and diamond jewellry.

Fri, 08/24/2012 - 15:24 | Link to Comment FeralSerf
FeralSerf's picture

I only get ads for fixing limp dicks.  How do they know this shit?

Fri, 08/24/2012 - 13:55 | Link to Comment jumbo maverick
jumbo maverick's picture

The repukelicans are starting to get it now but way too late. They are proposing this only in hopes of swaying the Ron Paul supporters because they have finally realized they need this group to beat obunghole.

My mom said the other day she is voting for obunghole mainly because he is a nice person. My head about fucking exploded. The repukelicans made the wrong choice. They should have chosen Ron Paul. He was the only candidate that had an opposing platform than all the other candidates.

When Ron Paul was at a past debate in the Carolinas earlier this year he mentioned the Golden Rule and how we should treat others, in this instance he was speaking of other countries, as we would like to be treated.

Paul got booed for saying this. I wonder if the repukelicans had picked Paul instead of romnoid would my mom vote for Paul because he is a nice man? Remember the golden rule. Treat people like you want to be treated. I believe that Paul lives his life under this philosiphy. I know obunghole doesn't in fact I worry obunghole may send a drone right thru my living room window one day.

Repukelicans stepped on their dick big time and now they don't know what to do. The next four years are going to get crazy. Good luck to everyone

Fri, 08/24/2012 - 13:58 | Link to Comment Dungeness
Dungeness's picture

Bingo! I don't think the Ron Paul supporters will fall for it and go for Romney.

And why did they choose Paul Ryan for VP? Because the name sounds sort of like Ron Paul or Rand Paul?

Fri, 08/24/2012 - 15:14 | Link to Comment NRGIsFree
NRGIsFree's picture


I am a Ron Paul supporter and will absolutely not fall for this repukelican trick. I'm writing in Ron Paul. As far as I am concerned we might as well get the communist Obozo so everyone can see what it is they have been supporting and we can revolt and move on.

Fri, 08/24/2012 - 13:56 | Link to Comment NRGIsFree
Fri, 08/24/2012 - 13:57 | Link to Comment New American Re...
New American Revolution's picture

Fucking idiot doesn't know what he's talking about and clearly doesn't understand how or why and what it takes to make a classical gold standard operate successfully.  I'd post it, but Tyler won't print it.   Tell you what, I'll post it on my blog at www.electanewcongress.com by next week sometime.   I'm getting tired of people lampooning a CLASSICAL GOLD STANDARD when they don't even know the difference between a classical, phony, or replacement oil standard like we have today.   Everyone keeps calling it a fractal system (which it is), but its central currency status is as an oil/dollar standard.   It's not that hard to understand once you can grasp the basic fundementals.  It just appears as an abstract because we've been living in a tyrannically based political and economic system for so long it is hard to conceive something else.  

Fri, 08/24/2012 - 14:01 | Link to Comment NRGIsFree
NRGIsFree's picture


I have to post this link as it relates to the "oil standard" and opportunities available upon it's inevitable demise.

http://www.zerohedge.com/forum/2012-08-08/energy-oil-petrol-dollar-and-t...

Fri, 08/24/2012 - 13:58 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

the usa may or may not return to a gold coin standard. regardless, i'll continue my own personal gold standard, or more accurately, bimetallic standard.

referencing the article, i think all parties involved acknowledge that the gold coin standard becomes viable with gold above $8000 per ounce. so to repeat the point yet again, it's price that will bring back the gold standard, not the ounces of gold held by the treasury at current (8000 tons) levels.

lets say that the gold maestros are correct and the dollar collapses to 1/5000th an ounce of gold. from 1/5000 to 1/8000 is "only" 60% which is about what apple seems to move each year.

i can see it happening.

btw: how many would have thought a decade ago the usa would be at war in afghanistan for 10 years? or that we would run deficits north of a trillion for four straight years? etc etc ... this is not your mother's america anymore. anything can happen. every day is a jump ball for the future of the country. reminds me of all the books i've read on pre-revolutionary russia with all the plots and counterplots.

Fri, 08/24/2012 - 15:22 | Link to Comment blunderdog
blunderdog's picture

    how many would have thought a decade ago the usa would be at war in afghanistan for 10 years?

Not many, I guess, but I sure did.  Afghanistan is where empires go to die.  In a way, it was a relief that Dubya gave up on that shit to invade Iraq.

Fri, 08/24/2012 - 13:58 | Link to Comment kito
kito's picture

they arent going to confiscate gold, they are going to confiscate the 6 trillion in 401k accounts and convert them to government savings accounts with treasury ious.............gold was confiscated by roosevelt because it was linked to the currency.....now the government only cares about the currency itself...........they have no interest in going after gold, it wont help them out of this pickle.................so they will tap the 401ks....the idea has already been floated for the past several years....

http://www.allamericanblogger.com/9569/how-the-obama-administration-plans-to-screw-with-your-401k/

and dont forget that when the treasury couldnt borrow last year due to the debt ceiling, they went straight for the federal pension funds to cover their shortfall.....

http://www.washingtonpost.com/business/economy/treasury-to-tap-pensions-to-help-fund-government/2011/05/15/AF2fqK4G_story.html

now what do you think will happen when the world stops lending to the u.s. and the government needs much more than what is in the federal pension system has? worry about your 401k, not your gold...............

Fri, 08/24/2012 - 14:08 | Link to Comment fonzannoon
fonzannoon's picture

Kito sometimes me and Doc Engali talk about things other than your turkey sandwich. He was talking about variable annuities last night. One of the things about them is most of them don't even have money market funds anymore they just have bond funds. Bill Gross set himself up nicely.

Fri, 08/24/2012 - 14:18 | Link to Comment kito
kito's picture

that turkey sandwich has alot more substance than any bond annuity could ever have............the entire economy isnt built on a house of cards....its just based on virtual reality.............social security, pension funds, bond funds, credit derivatives......once people remove their virtual reality apparatuses, its going to get ugly.........

http://gnoted.com/wp-content/uploads/2009/01/virtual-reality-helmut.jpg

Fri, 08/24/2012 - 14:55 | Link to Comment toady
toady's picture

Get out of anything you can.

If your lucky enough to have a pension DO NOT count on it, it will be corzined.

401k, annuity, ANYTHING you can cash out, now is the time.

Fri, 08/24/2012 - 15:29 | Link to Comment blunderdog
blunderdog's picture

The only reason to invest in a 401K is for the tax break, anyway.  Get the fuck out and quit worrying.

When you make a deal with the Devil, you are at his mercy.

Choose wisely.

Fri, 08/24/2012 - 14:06 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Very simplistic.  You cannot have a gold standard and trade with mercantilists.  They will take all the gold.

 

Fri, 08/24/2012 - 14:14 | Link to Comment _ConanTheLibert...
_ConanTheLibertarian_'s picture

$250 billion worth of tungsten

Fri, 08/24/2012 - 14:15 | Link to Comment agmand
agmand's picture

It is MEANINGLESS, if the government still has to borrow every dime from the FED, at an interest ...

 

Fri, 08/24/2012 - 14:37 | Link to Comment Tirpitz
Tirpitz's picture

Not so for the Rothschild tribe fully independent Federal Reserve Bank!

Fri, 08/24/2012 - 14:19 | Link to Comment tarpuranus
tarpuranus's picture

"safety deposit box" ?

No...it's a "safe deposit box"

Nothing "safety" about it

Fri, 08/24/2012 - 14:27 | Link to Comment akak
akak's picture

It's funny how many people unthinkingly use that phrase ("safety deposit box"), when it is of course a "safe deposit box".  One cannot deposit safety in a box!

They are probably the same people who say such stupidities as "I could care less", "Back in the day", "ATM machine" or "PIN number".

Fri, 08/24/2012 - 14:35 | Link to Comment Tirpitz
Tirpitz's picture

Yeah, and the same folks constantly refuse to read any FAQ questions.

Fri, 08/24/2012 - 14:40 | Link to Comment kito
kito's picture

 "back in the day'" is a perfectly valid expression referring to a particular era or time that may have ecompassed the long lost values of the party reminiscing about that era..............

Fri, 08/24/2012 - 14:54 | Link to Comment akak
akak's picture

No, it is inane and meaningless gibberish.

Now, "back in the day when ... " is a valid and meaningful construction.  But hearing someone merely saying "back in the day" always elicits from me the same response: "back in WHAT day?"

Fri, 08/24/2012 - 14:24 | Link to Comment Joebloinvestor
Joebloinvestor's picture

How do people even get away with the BULLSHIT argument "there isn't enough gold to cover the US dollar"?

What that means is that there are either "too many dollars" or gold is under valued (more likely).

China and Russia are biding their time and have plans to become the next "reserve currency", backed by gold and whatever else of value.

That will be the BIG SPANNER in the works!

Don't forget that this "barbarous relic" is used by the fucking king of banks, the BIS.

 

What is sauce for the goose so to speak.

 

Gold bitches.

Fri, 08/24/2012 - 14:33 | Link to Comment Tirpitz
Tirpitz's picture

"If Roosewellian-style gold confiscation becomes reality once again, the safest place for your gold is going to be a snug safety deposit box in a place like Hong Kong or Singapore."

Just as long as they won't need the military protection of Uncle Sam. Look at Switzerland, where banks are selling out their employees names, and banks' employees are selling out clients' names in return to the tax agencies of various countries. The moment a similar 'treaty' is enforced negotiated with Singapore, the same moment the gold will be in the hands of the wider Goldman Sachs gang.

Regarding geopolitical events, the only safe place for the time being might be in Moscow and Tehran.

Fri, 08/24/2012 - 14:31 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

All that needs to happen is for the price of gold valued in each "dollar" has to go up.

If gold is worth as what we would think of as $12k, then the debt could be backed. 

Simon Black, you sir are an idiot.

Fri, 08/24/2012 - 15:12 | Link to Comment Likstane
Likstane's picture

I join you in your last remark; from the comfort of the presidential car on the Nepal express railway transiting from my diamond junket in Mongolia to my Hong Kong excursion to research vintage Merlot production faclities.  These trips are such a toil on my persona, however, in order to facilitate a robust description compatible with Mr. Black, I carry on.   

Fri, 08/24/2012 - 14:42 | Link to Comment Barry Freed
Barry Freed's picture

Better a hole in your backyard then a safety deposit box an ocean away.

Fri, 08/24/2012 - 14:43 | Link to Comment oldgaranddad
oldgaranddad's picture

Simon Black get your facts correct before you spout off.

Nixon did not "abolish" the gold cover clause. Nixon, by executive order, set the gold cover clause to zero percent. Any president by executive order can readjust the gold cover clause to any percentage up to one-hundred percent.

Fri, 08/24/2012 - 14:47 | Link to Comment Quinvarius
Quinvarius's picture

Going back to a gold standard would be easy and a huge boon to everyone except people who have access to a printing press.  And franly, I could not care less if JP Morgan suddenly had to turn a profit doing business to survive instead of getting printed money.  Price gold at 20k and ounce instead of 10k and suddenly you have all kinds of extra money and government credit to play with anyway.

And really, it doesn't matter what the government chooses to do.  It is going to happen anyway.  it always does.  Gold will rise until it backs the paper on its own because the market demands our debt be backed by a financial asset.  Standing in the way of that will destroy anyone who attempts it.

Fri, 08/24/2012 - 14:57 | Link to Comment Joebloinvestor
Joebloinvestor's picture

Exactly!

 

A"reset" of the gold to dollar ratio (probably $20k per oz) would give the US and EU governments all kinds of capital (printed to!) to fund their shenanigans until that cycle blows up.

Fri, 08/24/2012 - 15:21 | Link to Comment Quinvarius
Quinvarius's picture

A higher gold price remains the easiest way to kick the can.  Bankers are just rooted in some form of insanity that does not allow them to conduct themselves as if the same old easy fix that has always worked is an option.  They want to keep tinkering because they are sure they will figure out this problem with some "new math".  When an 8 year old with common sense and a non-scientific calculator can do your job better than you, your profession is worthless.

Fri, 08/24/2012 - 14:59 | Link to Comment Catullus
Catullus's picture

Correct, sir.

All that has to happen is banks use gold as collateral. That's it.  Counterparties will demand that gold be posted to extend credit. 

The price of gold may go up in short-term, but it could come right back down after it's re-introduction as a leveraging instrument if the system overall begins to deleverage. 

This analysis of looking at the current money supply totals and trying to divide it out by the amount of gold in the world is fundamentally flawed.  An almost instant deleveraging would begin and the trillions of dollars would be wiped off books.  No one can really know either what the numerator would be or what the denominator of gold pledged would be.

Fri, 08/24/2012 - 14:58 | Link to Comment Monedas
Monedas's picture

Gold is money, the unit is it's weight and fineness, governments are not needed, no gold standard, freedom is the absence of dictat, they are free to compete with their coinage but no monopoly no restrictions, gold is stand alone money and doesn't need government assistance, leave us alone and get out of the way, no studies, no committees, nothing, it's complete by itself in the eyes of those who use it, it's already international money, no UN, no FRB, no IMF, it's a fact .... governments can compete with their fiat or even gold backed curriencies .... but no conditions, no advantages, no borders, no restriction on movement, nada, nothing, no way, no how .... fuck it !

Fri, 08/24/2012 - 14:56 | Link to Comment JCC
JCC's picture

Simon Black sez "Besides, why would any politician want to be constrained from conjuring money out of thin air?"

Obviously he doesn't know what he';s talking about.

Besides, why would any Wall St Bank want to be constrained from conjuring money out of thin air?

Fixed It.

Fri, 08/24/2012 - 15:02 | Link to Comment CuriousPasserby
CuriousPasserby's picture

Since Roosewellian confiscation never included numismatic gold, I'm sticking to Proof sets of physical gold (as opposed to bulion), just in case. Also, 1892-1916 silver dimes, quarters, halves are surprisingly near spot still.

Fri, 08/24/2012 - 15:05 | Link to Comment blindman
blindman's picture

romney of bain capital to confiscate the
private gold holdings of the citizens
of the united states, a mormon, son of a governor.
that would be hilarious. if i had
any money i would pay to see it.
hilarious. the gut and glut raider/politician
from Utah or Massachusetts or Detroit
or Romulus, whatever. if he confiscates the
gold for his turbo, warp boosters and even
one gold holder complies i swear i will laugh
untill i actually choke to death.
speaking of choking to death we have the romulan
vs the kenyan in november. both of them worshiping
at the milken school of financial junk for financial
junkies and bonds dealers and traders in limbo.
hilarious.
then he can make crazy eddy and michael milken
his treasury secretary and attorney general and
ship all the gold to the middle east, give it
to dov.
then collapse the dollar and sell the Rockies
to some funny talkin' man from uzbekistan.
.
american national politics, hilarious. here is the
platform. we will take all your money and destroy
your credit and give it all to the fatest thieves
and the crookedest criminals we can find on wall
street, london, washington d.c. and the middle east. how
about that, now vote for me. we're bringing back
the dust bowl good ol' boys.
.
good ol' boy (getting tough).wmv
http://www.youtube.com/watch?v=vM17rWh4LKo
.
america loved bonnie and clyde so much that it
put them in charge of banking regulation and
made their crew the bankers themselves. that
bit about them being shot up was a hoax and a
plot to make the americans think there is justice
within these borders. they live.
this is gruesome ... don't watch if you please
Bonnie & Clyde ambush aftermath death car film combo (HQ)
http://www.youtube.com/watch?v=4I2LUS0KJso

Fri, 08/24/2012 - 15:15 | Link to Comment blindman
blindman's picture

reminds me ...
Screw you, We're from Texas
http://www.youtube.com/watch?v=22Mrez7ahZA
.
CIA insider tells 911 truth. Time to re-examine your World-view, America!
http://www.youtube.com/watch?v=rnbMjAN7Bws&feature=related
.
America’s Descent into Poverty ~ Paul Craig Roberts
http://www.paulcraigroberts.org/2012/08/24/americas-descent-poverty-paul...
.

Fri, 08/24/2012 - 15:21 | Link to Comment robertocarlos
robertocarlos's picture

There is $10 trillion in gold. Does that mean all the assets in the whole world can only total $10 trillion?

Fri, 08/24/2012 - 16:20 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

No, don't forget other real assets:  land, buildings and Miss Venezuela's rear end!

Tuco

Fri, 08/24/2012 - 15:25 | Link to Comment Itch
Itch's picture

Enough with the gold standard, what does it even mean?  That governments wont warmonger, rape and buy votes because their potential to stir up shit is diminished by borrowing denominated in the barbarous relic? As best as I can politely put it, people would be lacking situational awareness if they believed that borrowing lumps of metal is any different from borrowing lumps of paper. If ia gold standard ever does happen, it’ll be just another temporary placebo for the public, an illusory austerity until the next round of  madness kicks off. And all this generation would be doing is making hay for the next generations at the drastic expense of themselves. Going through decades of austerity just so that the people 3 generations down the line can forget about our history and inevitably spunk it all away again, in their own bout of collective gibberish.

 

If that’s not bullshit I don’t know what is. Trying to get the house in order for organisms that don’t even exist yet? It’s a philosophical conundrum, not a monetary problem. If you believe that organisms floating in the infinity of space owe a living to organisms not yet here…well, each to his own. It all comes down to the classic fork in the road; reason or divinity.

Fri, 08/24/2012 - 16:10 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"Any person all wrapped up in himself makes a pretty small package!"  Unkkkk...

Tuco

Fri, 08/24/2012 - 15:30 | Link to Comment HungrySeagull
HungrySeagull's picture

Let's see.

Weigh the Gold in Ft Knox.

Assign x dollars to each ounce of Gold.

Purchase gold that people suddenly cannot afford. SIlver too.

 

Confisication is not necessary, because people will get greedy and sell.

Tax it.

 

The rest who hold... these would be our future kings and queens.

 

Flip a coin, feed a city. In this way you can move the earth with just a flap of a butterfly wing.

Fri, 08/24/2012 - 15:43 | Link to Comment MachuPicchu
MachuPicchu's picture

If Beh has been the printer, don´t worry he will be our Alchemist.!

Fri, 08/24/2012 - 16:08 | Link to Comment XitSam
XitSam's picture

Simon, your first sentence is wrong. It is a Gold Commission that is being talked about as part of the platform.

Fri, 08/24/2012 - 16:13 | Link to Comment daxtonbrown
daxtonbrown's picture

A return to the gold standard is a red herring. What could happen is to go to a fixed rule based fiat currency. Still a big upheaval.

Fri, 08/24/2012 - 16:24 | Link to Comment billsbest
billsbest's picture

How can we trust the Fed when it's stolen the German Central Bank's Gold?

http://chasvoice.blogspot.com/2012/06/us-fed-still-has-not-revealed-what...

 

Fri, 08/24/2012 - 16:29 | Link to Comment UGrev
UGrev's picture

So.. you would choose to NOT move towars reality. See, when you push fake shit for soooo long, the return to reality becomes even harder. There's no way we could sutain a gold standard without war. It's all been fake, every bit of it. The problem was the "we" accepted the charade and we kept on saying it will be ok unti it's not. Well now it's too fucking late to go back and the only way out is a giant fucking Jubilee with some small wars or no Jubilee and one giant fucking war to end all wars (where have I heard that before?). Either way, there's no way out without war in some part of this world on some significant scale. 

Good luck to all my fellow humans who aren't blinded by the magic show. I'll see you at the end of the tunnel. 

Fri, 08/24/2012 - 16:35 | Link to Comment reefermadness
reefermadness's picture

Are we still talking about Ron Paul? I know he alone can save the republic....

Fri, 08/24/2012 - 16:42 | Link to Comment UGrev
UGrev's picture

Your sarcasm is thick. Thank you falling into the propganda like a fucking lemming. You, like many others, mis-construe support for person who is significantly more qualified to operate a presidency that would have us thrive on freedom for some sick, twisted, cult like fantasy where Ron saves the world from an extinction level event.

In the future, don't be so gullible, it just makes you look like a fool. 

Fri, 08/24/2012 - 17:11 | Link to Comment jimod
jimod's picture

Kilowatt Hours are better than gold, for monetary backing.

Don't you think?

Real and Universally useful.   And elastic, produce more and more each year.

Governments can produce it and fund themselves.....

 

 

Fri, 08/24/2012 - 17:01 | Link to Comment Downtoolong
Downtoolong's picture

the safest place for your gold is going to be a snug safety deposit box in a place like Hong Kong or Singapore.

Or hidden somewhere only you know about. And you know I'm serious, because, I'm not telling you or anyone where.

 

Fri, 08/24/2012 - 17:46 | Link to Comment exodus11
exodus11's picture

As Mr. T says, "I pity the fool".

Fri, 08/24/2012 - 20:17 | Link to Comment UrbanBard
UrbanBard's picture

What makes you think there will be a choice? The value of the dollar is based solely on trust. What happens when all the trust is gone? The world's paper currencies are being simultaneously trashed. The Banksters will continue to screw us until we rebel. We will refuse to accept a SDR or an Amero to replace the dollar.

Will any of this be easy? No, people will starve. Riots and wars will break out. But, do you prefer to continue being conveniently fleeced by the Banksters? 

Is there enough Gold and Silver to go around? Sure, at some price. There is about twice as much gold as there was when we were last on a gold standard before 1914. (170,000 tons) 

The kind of gold standard we have matters. For most of her existence, America had in circulation a Silver Dollar coin which was a little smaller than the Spanish Reale. Gold was used to balance foreign exchange. This kept a nation’s banks from inflating their money supply too much before gold would flee the country. When the gold fled, then runs on banks would occur. Enough wealth of the Banksters and foolish depositors would be lost to rebalance the economy.

The Genoa Conference of 1922 established the Gold Exchange Standard where paper US Dollars and bonds were considered ”as good as gold” for reserve requirements. This, plus regulations, prevented gold from fleeing a country as the money supply increased. The present regime will end when the dollar stops being the world’s reserve currency or the dollar become worthless in a hyperinflation. Neither case will be easy.

Fri, 08/24/2012 - 20:32 | Link to Comment sullymandias
sullymandias's picture

I sure hope Simon Black is paying for these guest post placements. They are consistently poorly rated by ZH readers.

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