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Video On Gold As Independent Money - Return to Gold Standard Advocated in Print and Video

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From GoldCore

Gold Seen as Less Risky Currency - Return to Gold Standard Advocated in Print and Video

Gold is marginally lower in all currencies today (USD 1,611, EUR 1,113 and GBP 983 per ounce) but remains close to record nominal highs in major currencies on U.S. and Eurozone debt concerns. With the risk free rate of return of U.S. Treasuries (Treasury bills, Treasury notes and Treasury bonds) coming into question, gold is increasingly being seen by many as a less risky asset and as a less risky currency.


Cross Currency Rates

While the focus shifted from the Eurozone debt issues to U.S. debt issues this week, gold is also being supported by currency debasement and rising inflation internationally and the now very real risk of a recession in the U.S. and a global economic recession.

This comes at a time of continued geopolitical risk from social unrest in the Middle East and Africa and from the continued risk of conflict in the Middle East.

Video: ‘Gold – Independent Money’

Asian indices were higher except for stocks in India which fell after the surprise 50 basis point interest rate rise – a sign of risk markets sensitivity to rising interest rates.

European indices are mostly lower and the FTSE is 0.1% lower after UK GDP data showed the UK may be entering a recession. UK GDP rose just 0.2 percent in the second quarter, slowing from the first quarter’s feeble 0.5 percent growth despite historically low interest rates at 0.5%.

Calls for a return to some form of gold standard become louder by the day.

Once the preserve of fringe libertarians and hard money advocates, there are an increasing number of more “respectable voices” calling for a debate on the merits of sound money in order to protect taxpayers and economies from the vagaries of fiat currencies and the modern money printing and digital creation experiment.

In recent months, joining Ron Paul, the presidential candidate, have been the President of the World Bank, Robert Zoellick, the ‘Father of the Euro’, Professor Robert Mundell and publishing magnate Steve Forbes.

World Bank chief Robert Zoellick said it was time to "consider employing gold as an international reference point."

“Gold is nobody’s liability and it can’t be printed,” Mundell told Bloomberg. “So it has a strength and confidence that people trust.”

Mundell has suggested that an improved global monetary system could be achieved by tying together the US dollar, euro and gold ( see article by Judy Shelton in Commentary section).

The Swiss parliament is soon to hold hearings on a parallel Swiss "gold franc".

Utah has already passed a state law that recognizes  gold and silver coins as legal tender in Utah.  A dozen other states are considering similar laws.

As the world monetary system and the twin pillars upon which it rests, the dollar and euro, risk unraveling, gold’s time tested attributes as a foundation of stability is being increasingly accepted.

Contributing editor to Money Week, Dominic Frisby, (who we had the pleasure of meeting with last week) has just released an excellent video - ‘Gold: Independent Money’.

A picture paints a thousand words and a video hundreds of thousands of words and this is a very informative video about our modern monetary system, fiat currencies and gold.

It shows how fiat money has led to wars, massive debt, social inequality, economic bubbles, rampant consumerism, and environmental destruction. It shows that a return to a gold standard would help ameliorate today’s monetary, financial and economic ills.

“A gold standard will not cure every social ill in the world, nor will it stop all senseless wars. Nothing will.

However, by now it should be clear to everyone that the current fiat system is good only for bankers, brokers, politicians, war mongers, and the already wealthy. Everyone else loses as inflation eventually eats away at what's left of the rapidly shrinking 'middle class'.

All fiat currencies including the US dollar are doomed. The only debate is the path it takes to get there.”

‘Gold: Independent Money’ can be seen here or see Commentary section below.

NEWS

(Reuters) -- Gold steady below record; debt talks eyed
http://www.reuters.com/article/2011/07/26/businesspro-us-markets-precious-idUSTRE7592IU20110726

(Wall Street Journal) -- Gold Hits High on U.S. Debt Divide
http://online.wsj.com/article/SB10001424053111903999904576467711152155054.html

Gold Trades Near Record as Obama Warns of ‘Deep Economic Crisis’ From Debt
http://www.bloomberg.com/news/2011-07-26/gold-holds-near-record-as-obama-says-default-would-trigger-economic-crisis.html

(Reuters Africa) -- South African strikes to spread to gold sector
http://af.reuters.com/article/southAfricaNews/idAFL6E7IQ03Y20110726

(Bloomberg) -- Dollar, Treasuries Fall on U.S. Debt Outlook
http://www.bloomberg.com/news/2011-07-26/asia-stocks-gain-u-s-futures-oil-fall-before-obama-speech-on-debt-limit.html

COMMENTARY

VIDEO: ‘Gold: Independent Money’
http://www.goldcore.com/goldcore_blog/gold-independent-money

(King World News) -- Marc Faber - The “Great (Monetary) Reset” Will Destroy Cash
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/7/25_Marc_Faber_-_The_Great_%28Monetary%29_Reset_Will_Destroy_Cash.html

(GATA) -- Murray Pollitt: End price suppression and let gold rise to reliquify world
http://www.gata.org/files/MurrayPollitt-07-19-2011.pdf

(Goldseek) -- Real Performance (Inflation Adjusted) for Commodities, DJIA, Silver and Gold
http://news.goldseek.com/SpeculativeInvestor/1311660540.php

(Weekly Standard) -- Gold Standard or Bust - Fixing the dollar before it’s too late
http://www.weeklystandard.com/articles/gold-standard-or-bust_577314.html

(Wall Street Journal) --  Video discussion on Gold: Simon Constable discusses with Mark Hulbert, John Bussey and Alan Murray
http://online.wsj.com/article/SB10001424053111903999904576467711152155054.html

 

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Tue, 07/26/2011 - 08:07 | 1493881 williambanzai7
williambanzai7's picture

How long until Zoellick gets arrested for a hotel sex crime?

Tue, 07/26/2011 - 08:49 | 1493952 Pladizow
Pladizow's picture

Simply, reversion to the mean - and gold is historically the mean!

Tue, 07/26/2011 - 12:34 | 1494858 JoeSexPack
JoeSexPack's picture

Central banks own most gold & will control that same as paper.

 

Need competing currencies to keep them out.

 

Oil notes, tobacco certificates, airline credits, gold, silver & copper, whatever.

 

BTW, what do you look like in a wonder-bra?

Tue, 07/26/2011 - 08:09 | 1493883 rsnoble
rsnoble's picture

Before we get to far ahead of ourselves........do you suppose we should at least take a look inside fort knox to see if we actually have something in there besides a stack of IOU's??  Boy wouldn't that be the shits.

Other than that for whatever reason I kinda get turned on by older used up gals.  I just got an erection seeing Hillary Clinton.  Someone please help me.

Tue, 07/26/2011 - 08:17 | 1493897 Sean7k
Sean7k's picture

There is no hope for that level of depravity. You are doomed... :)

Tue, 07/26/2011 - 09:00 | 1493987 midtowng
midtowng's picture

My only problem with the gold cheerleading is that the phrase should be, "Gold AND Silver Standard."

The Constitution says we should have a bi-metal standard of money. The inclusion of silver should give the monetary base just that hint of inflation that would keep the debt-laden masses satistisfied, while still keeping a lid on government spending. it also helps to democratise the monetary system.

Tue, 07/26/2011 - 10:19 | 1494212 pinehog
pinehog's picture

Which constitution are you referring to?  Certainly not the US Constitution as there is no mention at all that states US currency must be backed by gold or silver.

Tue, 07/26/2011 - 11:30 | 1494578 baby_BLYTHE
baby_BLYTHE's picture

then why did the Founding Fathers bother to put it in there?

I don't see any mention of fiat paper in there either.

Tue, 07/26/2011 - 11:40 | 1494631 TumblingDice
TumblingDice's picture

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

Armed with google, it took less than a minute to find that article. Do your research homie.

Tue, 07/26/2011 - 09:27 | 1494047 Long-John-Silver
Long-John-Silver's picture

Just looking inside would not let you know if most of what's in there is really Gold. It could be a lot of Gold plated Tungsten. 

Gold-Plated Tungsten Bars

http://www.safehaven.com/article/15191/gold-plated-tungsten-bars-yes-or-no

Tue, 07/26/2011 - 09:40 | 1494052 GetZeeGold
GetZeeGold's picture

 

Heh....that gold in Fort Knox is only worth about $45 an ounce....if it's even there at all.

Pointless to even look I would say.....hardly worth the time.

 

Tue, 07/26/2011 - 08:09 | 1493884 antidisestablis...
antidisestablishmentarianismishness's picture

"All fiat currencies including the US dollar are doomed. The only debate is the path it takes to get there."

Yes, well, if you accept the premise then the path is the only thing that matters if you're trying to make money off this situation.  Declaring that the path is open to debate is like saying the market will fluctuate...thanks! 

Tue, 07/26/2011 - 08:18 | 1493895 Quintus
Quintus's picture

So if I told you that the S&P would be at 20,000 by this time next year, the only way to make money out of it would be if I told you precisely how it would get there?

If you want to make money out of the collapse of fiat currency, or more precisely preserve your wealth, then regardless of what path to its inevitable doom it takes, just keep as much of your wealth as possible out of fiat currency and wait.

Tue, 07/26/2011 - 08:11 | 1493887 Vlad Tepid
Vlad Tepid's picture

Gold standard.  The sooner the better.

Tue, 07/26/2011 - 08:12 | 1493890 Freewheelin Franklin
Freewheelin Franklin's picture

Let the markets decide the currency. Gold is probably the best currency, but it shouldn't be forced on people anymore than a debt-based fiat currency should. Hold banks to the same standards as any other business. I could quote Vera C Smith, but I'm feeling lazy and most of you guys probably already understand free banking and competing currencies.

 

You can print money, but you can't print wheat. - Rick Santelli

Tue, 07/26/2011 - 12:33 | 1494852 JoeSexPack
JoeSexPack's picture

Agreed, central banks own most gold & will control that same as paper.

 

Need competing currencies to keep them out.

 

Oil notes, tobacco certificates, airline credits, gold, silver & copper, whatever.

Tue, 07/26/2011 - 08:13 | 1493891 cossack55
cossack55's picture

Try spending it. Here is an experiment. Take an Ike dollar ($1.15 at coin shows) and present it for payment to basically any store in amerika. Most think it is foreign currency and decline. the rest call for a manager.

Tue, 07/26/2011 - 08:35 | 1493927 Id fight Gandhi
Id fight Gandhi's picture

Same can likely be said for the current dollar coins. I gotta try going to a fast food drive thru and paying in dollar coins.

Tue, 07/26/2011 - 10:44 | 1494314 RockyRacoon
RockyRacoon's picture

Your "experiment" falls flat.   I carry Kennedy halves, Ike dollars, and the "gold" dollars instead of the regular coins.   I've never had any one of them refused.  Never.  Some of the younger clerks look at them and ask what they are now and then, but they are to be forgiven for that.   It gives me a chance to educate.  My bank knows to give me back change in odd coins they have in the drawer and $2 bills.   I get a silver coin now and then or a 40% Ike or Kennedy now and then.   The coinage is not that difficult since the U. S. adheres to size parameters and value designations unlike a lot of other countries (like Canada) that put out dozens of different types yearly.   Having a too wide variance in types and denominations doesn't add "interest" to a nation's coinage, it adds instability.

Tue, 07/26/2011 - 15:38 | 1495619 fallout11
fallout11's picture

Flip side, in 20 years I haven't found anyone yet who would give accept, for even a single cent more, a >1964 coin (90% silver content, worth substantially more than face value) versus the equivalent <1966 one (zero silver content, worth a fraction of face value). Both are worth exactly "face value" for products and services of any stripe.  The fiat currency experiment has been a complete success in terms of human acceptance, at least in the US.

Thu, 07/28/2011 - 12:36 | 1501437 RockyRacoon
RockyRacoon's picture

Really?   For really real?

How much silver coinage is still in circulation?

That should tell you all you need to know.

Thu, 08/18/2011 - 11:12 | 1572967 fallout11
fallout11's picture

Really, for real really.  

Used to be quite a bit out there still, 20 years ago (or more). Dimes especially.  Except for the silver run up in 1979-80, I can't remember a single time in my life when most anyone gave a crap about the 90% silver ones, save the handful of coin collectors out there and kids, who thought the old ones were "neat" just because they were old. John Q. Public (i.e. 99% of the population), on the other hand, still traded them at face value, today exactly the same as back in 1965 (yes, I was alive for that changeover too).  No one horded 1964 coins in 1970, they were just used for change.

Rocky, I know that you collect, buy, and sell coins regularly, hence beware of confirmation bias in this regard. You're too close to the tree to see the forest. Pretty much anyone else older than 40 will tell you the same thing though, that "junk silver" collection is and always has been totally off the radar for 99.9+% of the US population. And THAT, my friend, is why there is so little silver coinage still in circulation....much like Action Comics #1, no one thought it valuable for decades, and treated it as such. Go into your favorite restaurant, say nothing, and slip one in with your regular change when you pay. I guarantee they won't even notice, much less approach you with a "discount" for your generosity.  Same as it ever was, at least in my memory.  The junk silver coins available for purchase in bulk today came from sifting through vending machine tills, payphone tills, bank rolls, and the like, where once again the average Joe had treated them at face value, and leftover "good" ones sold for melt value during the 1980 run-up.  A dime is a dime, except when the rare someone thinks otherwise.  Good luck attempting to "educate" a counterparty in a business transaction to the value, perceived or otherwise, of the article in question.  

Tue, 07/26/2011 - 08:15 | 1493893 Sean7k
Sean7k's picture

Very succinct video. About the right length for American audiences and it avoids becoming too complex for the American mind. Unfortunately, it ignores the historical record regarding government, banks and their willingness to suspend law in the face of any difficulty they deem to be injurous to their health and future.

Totalitarians will never willingly curb their abuse of power and influence. The only persuation that the State understands is the one it wields conclusively- coercive power. This points up the deficiency of education in a population easily flumoxed. 

Still, an ounce in the hand can have magical transformative powers. The ability to give American consumers the experience of gold or silver may be the best course of action.

Tue, 07/26/2011 - 09:56 | 1494116 i-dog
i-dog's picture

"Totalitarians will never willingly curb their abuse of power and influence."

The video addresses that point. Quote:

"The best way to stop the abuse of power is to spread it as thinly and widely as possible."

The Founding Fathers also recognised the same point, which is why the Constitution retained so much power with the states---and also split the power in Washington between Congress, President and SC.

It's a shame that the American people have been so ready to support the growth of central government since the first expansion of the American Empire with the Spanish-American War in 1898 (just 12 years before the Federal Reserve made unlimited central spending so easy).

Once you let go of the horses's reins, it is very difficult to pull it up again. A lesson for "next time".

Tue, 07/26/2011 - 08:20 | 1493902 I think I need ...
I think I need to buy a gun's picture

debt jubilee plus 5000 gold or

fofoa 36000 gold and floating gold and dollar

i'm going with fofoa as the end game for now

Tue, 07/26/2011 - 08:20 | 1493903 I think I need ...
I think I need to buy a gun's picture

debt jubilee plus 5000 gold or

fofoa 36000 gold and floating gold and dollar

i'm going with fofoa as the end game for now

Tue, 07/26/2011 - 09:36 | 1494073 Smiddywesson
Smiddywesson's picture

When all the gold is in the hands of the banks, there is every reason for them to reverse the gold price suppression game.  They have sweeping powers to hold down gold prices, just wait when they want higher prices to make their hoard worth enough to balance their doctored books.  It is inevitable.

Tue, 07/26/2011 - 08:22 | 1493907 Roger O. Thornhill
Roger O. Thornhill's picture

As I read it the article, I was reminded of the phrase "as good as gold." For whatever reason that meme is a deeply held belief, worldwide, and is certainly an older idea than printing limitless paper chits of dubious value.

Tue, 07/26/2011 - 08:24 | 1493909 reader2010
reader2010's picture

Inflate or Die.

Tue, 07/26/2011 - 09:30 | 1494058 thadoctrizin
thadoctrizin's picture

I figured out what the debt ceiling debacle is about this morning. Cnbs had a poll...do you think th US needs a debt ceiling. Imagine how easy it will be to inflate without a debt ceiling. Obviously Obama couldn't get rid of the debt ceiling unless there was a national emergency.

Tue, 07/26/2011 - 08:25 | 1493914 FranSix
FranSix's picture

Dominic Frisby has an ongoing series of interviews here on Commodity Watch Radio:

 

http://commoditywatch.podbean.com/

Tue, 07/26/2011 - 08:33 | 1493917 Mercury
Mercury's picture

Imagine working and saving some of the fruits of your labor (as gold), knowing that in 20, 30, 40 years it would retain it's buying power.

Imagine the state not being able to accurately calculate the amount of your personal wealth or easily lay it's hands on it.

Now try and calculate the chances of your soverign government ever fostering or even tolerating widespread personal ownership of gold.

Tue, 07/26/2011 - 08:41 | 1493937 Id fight Gandhi
Id fight Gandhi's picture

That's why since the history of commerce gold has been used. It will always by you the same amount of the things you need, so you cam safely save it.

If you worked hard for a whole year say 20 years ago, and saved half of that money your money would buy very little. But if you changed dollars to gold and saved it, your sweat labor would be preserved.

People need to wake up that we have been getting fucked with usury, devaluations and inflations. If anyone had a clue they'd be mad as fuck.

Tue, 07/26/2011 - 08:33 | 1493922 AUD
AUD's picture

I turned it off when he said "paper that represented safely stored gold".

That is bunk. The paper has never represented 'safely stored gold' but was merely redeemable in gold since gold is payment.

The paper actually represented real consumer goods. Ergo, consumer goods were 'monetised', rather than government bonds, mortgage debt, 'asset' backed securities......

Tue, 07/26/2011 - 08:40 | 1493935 Sean7k
Sean7k's picture

And who would have traded that money for consumer goods, if it had no ascertained value- based on being able to trade it for gold? Currency had to have value to be used as a subtitute for goods in a barter economy. That value came from the ability to redeem it in gold or silver. 

Futher, that value was present across currencies, eg the US use of Spanish Reales in the early years of the nation. People did not make global contracts in wheat. You even neglect the storability of a wealth instrument. Perhaps you should have watched the whole clip.

Tue, 07/26/2011 - 08:54 | 1493970 AUD
AUD's picture

That value came from the ability to redeem it in gold or silver.

Yeah, that's what I said. Maybe you should have read my whole comment

Tue, 07/26/2011 - 09:03 | 1493996 Sean7k
Sean7k's picture

No, you gave stonger emphasis to the idea that currency was valued in commodities, downplaying the idea that gold was the real basis of value. Try again.

Tue, 07/26/2011 - 09:23 | 1494035 AUD
AUD's picture

No, you try again. I said that currency never represented 'safely stored gold', rather, consumer goods.

 

Tue, 07/26/2011 - 09:48 | 1494093 Temporalist
Temporalist's picture

If it isn't safely stored how can it be redeemed?  With hope and dreams and fairy fart dust?

Tue, 07/26/2011 - 15:40 | 1495629 fallout11
fallout11's picture

See also "Comex", etc.  Physical trades at a premium to paper, always has, always will.

Tue, 07/26/2011 - 08:31 | 1493924 Gold Dog
Gold Dog's picture

Gold Dog for Treasury Secretary....I will have all this bullshit cleaned up by noon and then let my dog take over the heavy lifting!!

Tue, 07/26/2011 - 08:32 | 1493925 gordengeko
gordengeko's picture

http://www.dailymarkets.com/economy/2008/12/30/why-a-gold-standard-is-a-bad-idea/

~Culling the herd?~
"This is financial Armageddon. The result would be the financial equivalent of mandatory infection of the population with the Ebola virus. Maybe we could get Disney to lend a PR hand as we play “The Circle of Life” while we infect everybody with Ebola so people would be persuaded to sacrifice themselves for the Common Good."

Going to a gold standard will concentrate even more power and control in fewer hands than there is today.  Which one can only assume was the goal from the beginning.

Tue, 07/26/2011 - 08:52 | 1493947 Mercury
Mercury's picture


Interesting, I think the strongest argument for a gold standard or gold ownership in general is exactly the opposite.

 

Our chief executive has been rather keen on ratcheting up fiat denominated debt in the name of the "common good" as I recall and US private wealth is arguable more concentrated than it ever has been.

Tue, 07/26/2011 - 09:55 | 1494112 Temporalist
Temporalist's picture

Look at the Chinese as an example.  Are they concentrating power in fewer hands by actually telling their citizens to purchase precious metals?  If the U.S. Govt. and Fed weren't so disengenuous and/or corrupt then people that didn't know better, like some of the ZHers, would have been told to purchase PMs for decades.  Instead there has been a propaganda attack on anything that isn't the FRN paper ponzi powerplay.  They want paper because that is the control.  Gold removes that power from arbitrary hands into the hands of anyone that has land and wants to dig or pan by a river or just exchange goods and services for it.

If there is a gold standard or even if it's just a competing currency people can CHOOSE to only offer their goods and services for whatever currency they desire.  Once it starts circulating again in that manner anyone can have it if they work.

Tue, 07/26/2011 - 10:27 | 1494226 gordengeko
gordengeko's picture

People need to wake up... 

Professor Robert Mundell -Professor of Economics at COLUMBIA University ~and~ served as an economic adviser to the United Nations, the IMF, the World Bank, the European Commission, the Federal Reserve Board, the United States Department of Treasury and the governments of Canada and other countries.

Robert Zoellick- president of the world bank ~and~ former managing director at GOLDMAN SACHS.

Steve Forbes- editor and chief of the most influencial financial news publication in the world.

All 3 are touting a return to the gold standard.  Is this the company you fellow serfs want to be with???  Start asking questions and searching for answers for yourself as to why this could possibly be a horrible idea.  Thank your lucky stars we still have ZH pointing out the obvious...

BTW also ask why do these people(and other bankers) hate silver so much but love gold?

Tue, 07/26/2011 - 10:52 | 1494351 RockyRacoon
RockyRacoon's picture

I'll agree with you in one respect:  These folks may be talking their book.   I suspect that Mr. Forbes owns quite a bit of gold, and the others deal in gold all the time.   Perhaps, and this is a stretch, those mentioned other than Forbes might -- just might -- have good intentions.   Yeah, I know, that's a stretch, but we can't assume that all organizations bigger than your local PTA are out to screw us.   

Nah, never mind.

Tue, 07/26/2011 - 12:03 | 1494730 gordengeko
gordengeko's picture

It never hurts to take a cynical viewpoint once in a while.  It expands the awareness and causes the hamster to run faster keeping him healthy.  Given the advent of how prevelant the pharmaceutical industry is as well as the new and ever expanding technologies that are known (not sot mention the ones that are not spoken of) we need that lil sucker to run fast!

Tue, 07/26/2011 - 10:40 | 1494300 Smiddywesson
Smiddywesson's picture

Going to a gold standard will concentrate even more power and control in fewer hands than there is today.

Yeah baby, those that hold gold, and that would be me.  :-)

Money moves around, meaning it gets spent eventually.  However, all money comes from the public.  And when that public once again has a way to hold onto their wealth, the opposite of what you are suggesting will happen.  Wealth will become less concentrated.

Tue, 07/26/2011 - 08:38 | 1493931 Leraconteur
Leraconteur's picture

It is amazing that no gold as money proponent ever considers why large geo-political entities go off PM standards.

Just like England in 1931 was run out of the gold standard due to speculations, any nation that is on the gold standard puts itself at an extreme disadvantage to all other nations because they open themselves up to speculative attack.

If you put any given nation on to the Gold Standard, then the assets side of your monetary system is taken up by gold and thus any other nation, country, business, organization or person with enough assets will be able to simply buy up your asset side of your money supply and cause you to experience extreme economic volatility.

If you put all nations on the standard, then the smaller ones are prey to the larger ones.

This is why all nations have a fiat system. It places both sides of your monetary system - the assets (issued debt) and the liabilities (currency) - firmly within the control of the government of said nation and keeps control out of the hands of outsiders.

Putting a nation on the standard did not stop depressions, speculation, downturns or credit bubbles throughout world history. It never has. Pull up the economic history of the USA in the 19th. C. and look at what your 'honest gold based money system' caused then.

Tue, 07/26/2011 - 08:55 | 1493964 Sean7k
Sean7k's picture

England was not run off the gold standard due to speculation. Perhaps you can provide a source for that claim. England was rapidly expanding its' money supply to pay for the socialism it was implementing. It didn;t have the gold to support the creation of State largess. When the world economy began to face the excessive exuberance of State socialism and expanding fiat money, in a system that still required gold settlements between nations, we had depression.

The nature of gold, is that it keeps government honest. It contains its' ability to inflate its' currency supply. That is why England and all of Europe went off the gold standard.

Your argument of asset side speculation and buy ups is laughable. The US went off the gold standard because it was creating more debt than it had the ability to pay for. As nations saw the erosion in the dollar's value, they asked for gold. If the dollar had retained its' value, from production of goods and services, rather than just printing- there would have been no need to demand gold. As John Adams once said, "you don't have to force people to accept good money". 

As for the 19thy century, the only monetary problems were caused by excess creation of currency and banks holidays on specie redemption ( see A History of Money and Banking in the United States, by Rothbard). 

Credit bubbles are a result of massive inflation in the money supply and that is always a function of fiat creation. 

Tue, 07/26/2011 - 12:21 | 1494786 Leraconteur
Leraconteur's picture

 

@ A Sean7k

As for the 19th century, the only monetary problems were caused by excess creation of currency and banks holidays on specie redemption (see A History of Money and Banking in the United States, by Rothbard). 

Credit bubbles are a result of massive inflation in the money supply and that is ***always*** a function of fiat creation.

Nonsense. With the USA on a gold standard in the 1800's how was it possible to create inflation in the money supply? How did a series of boom-bust depressions occur with a gold-backed currency? Credit creation via other instruments was still possible even though the currency was gold-backed. Gold won't prevent this and it never has. Nations with gold coins as currency have experienced boom-bust cycles, depressions and credit and speculative bubbles throughout history.

"Credit bubbles are a result of massive inflation in the money supply and that is always a function of fiat creation."

Credit bubbles have occurred in nations with the gold standard.

Gold Standards also don't prevent wars as the video suggests it may lower the incidence of, but not eliminate, conflict.

Recall the Spanish looting the Western Hemisphere for gold for jewelry and coins?

You cannot assume that your gold won't be seized - the USA has already demonstrated what it will do in the instance of extreme monetary stress. Expect your gold to be seized just as it was in 1933, wiping out by Executive Order your gains from $260.

There are so many flaws in the "gold is the only honest money" theory that if fails within moments of contemplation.

 

Wed, 07/27/2011 - 14:10 | 1495024 GoinFawr
GoinFawr's picture

"Nonsense. With the USA on a gold standard in the 1800's how was it possible to create inflation in the money supply? How did a series of boom-bust depressions occur with a gold-backed currency?"

Actually, the examples you are referring to support the exact opposite of what your questions imply, as they occurred when attempts were being made to undermine the US' metal standard...Nice try.

"Credit bubbles have occurred in nations with the gold standard." See above.

"You cannot assume that your gold won't be seized..."

Yeah, whatever, this isn't the 20th century. And egregious injustice at the hands of an overreaching centralized power hardly bolsters your argument, rather it reinforces Sean's.

There are so many flaws in your comment that it fails to have a point.

Tue, 07/26/2011 - 08:57 | 1493976 earnulf
earnulf's picture

A Gold Standard would not preclude the operation of alternative currency means, i.e. barter/trade, which is what made up a great deal of the ordinary commerce in the 19th C.    Gold was still concentrated in the hands of the rich and was used as a store of wealth as it had been throughout history.     Speculation occurs anytime one means of payment (gold, dollar, euro, yen) rapidly exceeds the cost of goods/property/collectables in another location.   Cheap supplies in one location can be purchased by those with the means.

The Gold Standard however would provide a way to maintain your hard earned wealth, vs the existing fiat mandate which has seen the value of the dollar vs most measures fall by massive amounts (I believe 98% over 100 years is the generally quoted figure).    Which would you rather have, ten ounces of gold or $350 dollars from 100 years ago?    This is the standard that people look at, wealth retention.

Tue, 07/26/2011 - 09:01 | 1493990 FranSix
FranSix's picture

Large tonnage mines with widely disseminated gold in situ cause long term pollution problems, the least of which is arsenic poisoning of the water.  Cyanide solution is used in commercial production and mercury amalgam is still used in artisanal mining. (cyanide breaks up under UV rays with 400 hours of sunlight, but can leach out of the bed of tailings impoundments for years.)

Recently in the news:

http://hqyellowknife.com/news/local/news/Local/11/07/25/Giant-Mine-offic...

Sinkholes have occurred in Timmins, Ont at the former Hollinger mine owned by Goldcorp, but no word on ground water effects.  The former Homestake mine owned by Barrick is well known to have lasting environmental effects.

http://ow.ly/5NtbX

http://ow.ly/5NtfB

The whole problem with gold overall is that you have to mine it, refine it, and sell it into the market before it gets swapped out or confiscated. (ETFs, Central Banks)  Most of the period which is referred to in the video is the industrial revolution, which primarily used coal. This was during a gold price fix with its own severe pollution problems.  The production of steel after the industrial revolution required metallurgical coal in vast quantities.  

The best overall outcome would be floating gold and consolidation of currencies.

Tue, 07/26/2011 - 09:14 | 1494012 Rusty_Shackleford
Rusty_Shackleford's picture

I'm hoping your comment about the 19th century was some kind of attempt at satire.  Certainly you're aware that that particular period saw more human beings lifted out of the misery of subsistence survival than any other time in human history.  It was a period of unprecedented growth and prosperity.

 

It seems the heart of the concept of why a gold based monetary standard is bad is "because it doesn't let governments cheat and steal quite as easily".

Tue, 07/26/2011 - 15:45 | 1495644 fallout11
fallout11's picture

Most of that growth and prosperity came from the harnessing of cheap, readily available energy sources (fossil fuels, i.e. coal, oil, and gas), thus allowing for massive mechanization, industrialization, and wealth surpluses to be created, improving the quality of life for the also-exploding (thanks to surpluses again) population. Monetary standards and finance had very little to do with it.

Thu, 08/04/2011 - 11:39 | 1523973 Rusty_Shackleford
Rusty_Shackleford's picture

Monetary standards and finance had very little to do with it.

 

Yeah.  Why would anyone think that the very nature of MONEY would have anything to do with economic prosperity?

Stable prices, a dependable store of value, the ability to do accurate economic calculation for the present and future; yep,  it would have all worked out the exact same way if the money that was used lost 97% of it's purchasing power over the course of the century.

I concede.

 

Thu, 08/18/2011 - 11:23 | 1573119 fallout11
fallout11's picture

Those same "sound money" monetary standards existed in the 18th century as well, yet such was bereft of the 19th century boon "of unprecedented growth and prosperity" derived from the massive increase in available (and utilized) energy per capita. The 18th century economy, much like the 8th, was entirely "solar powered".  

Tue, 07/26/2011 - 10:46 | 1494330 Smiddywesson
Smiddywesson's picture

This is why all nations have a fiat system. It places both sides of your monetary system - the assets (issued debt) and the liabilities (currency) - firmly within the control of the government of said nation and keeps control out of the hands of outsiders.

Err...I think you left out the part about the government being controlled by insiders.  That's when your entire argument falls apart.  The whole point is keeping things out of the firm control of the government was the whole point of the USA.  Fail.  Go directly to US History 101 and study what the founding fathers actually said.   They would have hated Keynes and all the mainstream economists, and history has proven them right.  But, for some people this is a religion, and they cannot be persuaded by reality.  

Yeah, gold standards were imperfect, we should stick with this abortion of reality.  Right?

Tue, 07/26/2011 - 12:27 | 1494820 Leraconteur
Leraconteur's picture

I think you left out the part about the government being controlled by insiders. That's when your entire argument falls apart. The whole point is keeping things out of the firm control of the government was the whole point of the USA.

Gold standard places the alternative as putting your money into the control of the insiders of other countries.

One is bad, the other is catastrophic.

Tue, 07/26/2011 - 10:56 | 1494370 RockyRacoon
RockyRacoon's picture

You are so far off the mark that there is no place to start explaining why.

I suggest an immersion in self-education at Mises.org or FOFOA.

http://fofoa.blogspot.com/

Tue, 07/26/2011 - 12:28 | 1494824 A Nanny Moose
A Nanny Moose's picture

Monetary history in the 19th c also included 2nd Bank of the US, greenbacks, demonetization of silver, and several wars to pay for.

"The History of Money and Banking in the United States" by Murray Rothbard gives a pretty good account of exactly why these depressions occur. Government tinkering with the money. It correlates pretty well with efforts to fund wars...even back to Tulip speculation.

The littany of failures of our monetary systems over the years can be traced right back to the gold:silver peg in the Coinage Act of 1792. The prices of no two assets should ever be fixed. Such a peg is doomed to failure as Gresham's law takes over. May as well repeal gravity.

 

Tue, 07/26/2011 - 08:44 | 1493936 CitizenPete
CitizenPete's picture

The golden rule.  

A real Gold Standard is the last thing Americans would ever want. (Bank credit and currency pegged to the gold price is different.)

A global gold standard might be the the final nail for the US.

He who holds the gold makes the rule.  The IMF and Germany therefore will make the rules, as they are #2 and #3 in the list of gold reserves according to the World Gold Council.  The United States is supposedly #1, however according to various sources and as documented by GATA and others, the US Gold reserves are believed to be leased out. In other words, gold might be in the vaults of the Fed in NY and the Mints vault at Fort Knox as "allocated metal", but it is leased out (and double booked).   IT DOES NOT REALLY EXIST. We would all discover the truth real fast.

Some have pointed to Libya as a possible gold war over the "Dinar for Oil" proposal proposed by the same country. 

If all true, The Gold Standard may mean the final demise of the United States as a global superpower.  The USSA wouldn't be able to buy oil in gold Dinars, because nobody would want US Treasuries or the shit paper from the Fed in exchange for gold.  The US government does not create products or goods and it does not make an income from services -- it steals back the same shit paper it borrows from the Fed and other lenders, in every increasing piles.  Like a huge slug sucking it's own ass off. 

A gold standard might be like stepping on the slug. 

 

Tue, 07/26/2011 - 10:59 | 1494380 Smiddywesson
Smiddywesson's picture

That superpower status was a fiction dreamed up to keep us quiet while the powerful had their way with the country.  

Where does it say in the Constitution that we are to meddle in the affairs of other nations?  Where is the word superpower even mentioned?

This country was formed to keep the government from converting itself into a supergovernment.  The whole concept of superpower is wrong.

Thankfully, we are broke, because "the slug" needs to be stepped on.

Tue, 07/26/2011 - 08:47 | 1493949 island
island's picture

Pay off the debt in quarters!

http://www.youtube.com/watch?v=aW9oKt6vT-w&feature=relmfu

There is no reason for the US, or any country, to borrow money from banksters. 

None.

Tue, 07/26/2011 - 08:58 | 1493983 Id fight Gandhi
Id fight Gandhi's picture

Irony is that pre 65 us quarters have so much silver in them they're worth $8 in paper dollars.

Tue, 07/26/2011 - 10:14 | 1494182 au_bayitch
au_bayitch's picture

$7.3044 as per www.coinflation.com .

Tue, 07/26/2011 - 13:27 | 1495069 pops
pops's picture

Go to usmint.gov.

Order dollar coins in lots of 250.  They will ship them to you FREE.

If the credit card you pay with gives points or cash back, you're making a little on the deal.

Get the coins.  Use them (I do) and screw the Fed.

Tue, 07/26/2011 - 08:52 | 1493965 Clint Liquor
Clint Liquor's picture

This is why all nations have a fiat system. It places both sides of your monetary system - the assets (issued debt) and the liabilities (currency) - firmly within the control of the government of said nation and keeps control out of the hands of outsiders.

Absurd statement. Have you ever heard of FX? In the next few years you will see just how 'firmly in control' they are.

Tue, 07/26/2011 - 08:52 | 1493966 Manthong
Manthong's picture

So gold discipline prevents environmental rape?

OK then.. here's one for the liberals out there:

"Save the planet - buy gold."

 

Tue, 07/26/2011 - 08:55 | 1493973 chistletoe
chistletoe's picture

one small problem.

 

There isn't enough gold.

 

"Money" is something that pretty much everybody on earth has to have and to use, right?

In the whole history of mankind, only roughly ten billion ounces have ever been mined and recovered,

or roughly one ounce per person.  How's it going to work for money if there is only one coin per person?

Tue, 07/26/2011 - 09:00 | 1493986 Sean7k
Sean7k's picture

This argument is trotted out on a regular basis.  Please read FOFOA regarding freegold and the way this type of standard would function. Nations would still use currency, but there woold be capital requirements based on gold supplies and the redemption of currency in specie. 

Further, there is silver and other monetary substitutes that can be used. Additionally, gold would merely have its' value in a given currency adjusted to equal supply.

Tue, 07/26/2011 - 10:04 | 1494144 Temporalist
Temporalist's picture

That is completely false...there is enough at the right price for everyone and the denominations can be reduced to minute amounts.  There could be 1g clad coinage or coins with .01% gold or any mixture of precious metals as chosen.

 

Additionally people can choose to store gold in audited accounts and reduce their amounts via credit cards like Peter Schiff is doing (unavailable to US citizens presently because only FRNs are allowed in the Land of the Free).

Tue, 07/26/2011 - 10:07 | 1494153 jimmyjames
jimmyjames's picture

or roughly one ounce per person.  How's it going to work for money if there is only one coin per person?

 

*******************

Gold is divisible-so of course there's enough-

There is no such thing as too small of a money supply-

There is such a thing as too high of prices for goods and services-

Lock the supply and all goods nd services must adjust to that fixed supply-

Tue, 07/26/2011 - 11:04 | 1494415 Smiddywesson
Smiddywesson's picture

There isn't enough gold.

Oh, yes, there is plenty enough gold to substitute for all the paper, that is, at $65,000 and ounce.  And the only people standing in the way of the creation of that system are the ones holding all the gold.

Think it over.  

Tue, 07/26/2011 - 12:37 | 1494870 A Nanny Moose
A Nanny Moose's picture

Prices adjust according to the quantity of money.

Too much concern with "how." We do not concern ourselves with how pencils are made; how gas gets to the gas pump; how food gets to the store; yet somehow, it all still happens. What we need to be asking is, "Why?"

 

Tue, 07/26/2011 - 09:18 | 1494020 Dan Hot
Dan Hot's picture

I'm not convinced that gold is the answer after watchng Bill Still argue that it would make no difference as those with the most gold would control the issue of a gold-backed currency. For him, controlling the supply of currency is the key.

Tue, 07/26/2011 - 10:19 | 1494195 i-dog
i-dog's picture

Bill Still is a shill (for Keynesian fiat expansion). Great storytelling videos, but poor solutions.

Tue, 07/26/2011 - 11:07 | 1494429 Smiddywesson
Smiddywesson's picture

I'm not convinced that gold is the answer after watchng Bill Still argue that it would make no difference as those with the most gold would control the issue of a gold-backed currency. For him, controlling the supply of currency is the key.

Adopting a gold standard isn't about stripping the haves of their wealth.  It's about keeping them from continuing to strip it from the little guy.  Bill Still is wrong to confuse social injustice and wealth inequality issues with the gold standard issue.  It is intellectually dishonest.

Tue, 07/26/2011 - 09:26 | 1494040 Nate H
Nate H's picture

"All fiat currencies are doomed"

 

This is silly and representative of internet taught analysts.  "Fiat" just means that its backed by the government, not by anything physical. If the government/society in question has abundant natural resources, especially energy, social stability, rules, laws, technology, trade, etc. there is nothing wrong with 'fiat'.  If a country has a currency backed by gold but they have high inequality, terrible environment and little energy, that system is going to break WAY before the 'fiat' system.

 

Fiat is a word overused in these discussions. Energy is the key.  I agree that our financial system is in trouble - but that is because we grew exponentially and don't have the  natural resources to continue the previous trajectory so some/much of the leveraged financial claims have to go away - but its not because of 'fiat'.

Tue, 07/26/2011 - 10:30 | 1494236 i-dog
i-dog's picture

" "Fiat" just means that its backed by the government,"

... which is WHY it is doomed!

The reason that democratic governments get voted out of office every 1 - 4 years is BECAUSE people are not happy with how governments abuse their powers.

Tue, 07/26/2011 - 09:26 | 1494043 Modern Money Me...
Modern Money Mechanics's picture

A gold standard is only a parital solution because the capital machine has the gold. Gold's contribution is its constant value. See "The Golden Constant: The English and American Experience 1560-2007" by Roy W. Jastram

Nevertheless, there have been credit induced bubbles and panics under a gold standard. Gold does not control stupidity coupled with greed. See "Manias, Panics, and Crashes: A History of Financial Crises" by Charles P. Kindleberger

There has, however, been 100 years of fiat banking stability acomplished through full transparency in the public state bank of North Dakta See: http://publicbankinginstitute.org/ and http://publicbanking.wordpress.com/

So the real issue, as we all know, is educating the public about banking... The capital holders want an ignorant public so they can be farmed for profit and control and historically that has been done under a gold standard.

Tue, 07/26/2011 - 09:28 | 1494048 Hoody Who
Hoody Who's picture

This video, a gold backed world is a terrible mistake.

http://www.youtube.com/watch?v=c9U3lHCgylo

Tue, 07/26/2011 - 09:35 | 1494071 Byte Me
Byte Me's picture

To even begin replacing the current fiat global crapshoot with a 'gold standard' the current system has to dissolve into chaotic failure. It's not a question of system A failing on Friday and system B being up and running at 9am on Monday.

Expect turbulence.

Expect panic

Expect megadeaths mostly through starvation.

And no electricity.

Tue, 07/26/2011 - 10:47 | 1494118 Overflow-admin
Overflow-admin's picture

What's your point? Isn't the world already full of turbulence, panic, megadeaths, starvation and lack of electricity? Just ask you the question without extrapolating from yourself.

 

Look at the world with your eyes, because [your] eyes can't lie.

Tue, 07/26/2011 - 10:44 | 1494187 Temporalist
Temporalist's picture

Seriously?!?!  Do you not see people starving around the world now?  And there not genocides and military coups and deposing of foreign leaders by the CIA since the FRN and the Fed started their global reserve currency domination? 

Do people not understand how bad uncontrolled paper money has been over the last 100 years?  Why have gold and silver carried humanity for thousands of years through every natural cycle but now the Money Masters are trying to make or prevent the cycles and are completely unsuccessful and that is okay?

There is not epic turbulence and panic in the S&L scandal, Dotcom crash, housing collapse, Lehman, Bear Stearns, AIG, ENRON, etc?  There is ONE QUADRILLION potentially in toxic derivatives...would that ever happen when gold was restricting gambles like that?

The fiat currency not only allows the printing of money it allows the creation of derivatives of derivatives of something that is associated with something like an asset of value.

People can make electricity by riding a bike indidentally and can listen to a radio or use a flashlight by cranking one. 

Tue, 07/26/2011 - 11:14 | 1494484 Smiddywesson
Smiddywesson's picture

I 100% agree about the crisis that will result from switching systems.  On the other hand, the Euro transition was seamless and they have had several years to perpare for the transition.   It will no doubt be dramatic, but maybe they can pull it off without zombies rising from the crypt.  We will see soon.  Very soon.

Tue, 07/26/2011 - 10:06 | 1494149 Temporalist
Temporalist's picture

Shared on another article:

 

Morgan Stanley Raises Gold, Silver Targets Through to 2016

"Morgan Stanley raised its gold forecasts for 2011 and each of the next five years, boosting predictions for annual average prices by as much as 24 percent on heightened demand for haven commodities."

But if you want a real laugh look at the actual prices they are "forecasting" for the upcoming years!

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDBlBFRGgMXg

Tue, 07/26/2011 - 10:10 | 1494158 Urban Redneck
Urban Redneck's picture

So what time is the raid on gold scheduled for today to try and take the $1600 strikes off the table?

Tue, 07/26/2011 - 10:13 | 1494174 lynnybee
lynnybee's picture

I am interested to know what others think about BILL STILL & 'valueless money' .    BILL STILL says that going back on a gold standard is the 'fake answer' & will not solve our problems.    He says we need to go on a monetary system with no national debt & the currency issued by the sovereign & that currency be 'valueless' .      I listened to him recently on this youtube clip :     http://www.youtube.com/watch?v=wOacViyCMhQ&feature=feedu  

Thank you & regards to everyone !!   

 

Tue, 07/26/2011 - 11:08 | 1494437 Overflow-admin
Overflow-admin's picture

The logic of valueless money against banksters is correct, but... price of goods and services also depend of offer and demand. If that money having no value enters in the economy, how do you manage with your "savings"? If it's money you must have a way to transform it in whatever you need to have a quiet and wealthy life.

As there is much more money in the system that the real wealth it can buy, I think the only path is trough massive inflation.

Tue, 07/26/2011 - 10:16 | 1494193 pinehog
pinehog's picture

Great ad.  I guess since the ad states that historically the gold standard has always worked just fine, we're to believe it.  Why bother looking into the history ourselves?  Do yourselves a favor and learn a very little about the history by watching this:

http://www.youtube.com/watch?v=swkq2E8mswI

Tue, 07/26/2011 - 10:20 | 1494214 El Viejo
El Viejo's picture

How about cattle as money.  They transport themselves.  Pay interest in a refreshing drink.  They keep your lawn mowed.  When they mature they pay other dividends like leather seats for your pickup. 

Tue, 07/26/2011 - 10:36 | 1494242 TK69
TK69's picture

"Mundell has suggested that an improved global monetary system could be achieved by tying together the US dollar, euro and gold"

 

NO, NO, NO !!!! THIS IS NOT WHAT YOU WANT!!  A GOLD STANDARD ONLY MEANS THAT ALL PAST OBLIGATIONS (DEBTS) BE PAID IN GOLD WHICH MEANS THAT THE BANKS WILL OWN THE GOLD.  IN ADDITION, PEGGING SUCH THINGS TO GOVERNMENT CURRENCY ONLY MEANS THAT THE PRICE WILL BE MANIPULATED BY GOVERNMENTS. 

What you want is independent, individually owned, gold, silver, and other coinage, along with other commodities that compete with the dollar and each other,  based on contract law and private parties, with standards of quality and weights, and with notes that are 100% backed by the particular commodity.  And you need to replace interest with fees, mandate that banks act only as loan intermediates between debtor and debtees, mandate that banks have 100% reserves, abolish the fed, and have free banking.

Tue, 07/26/2011 - 11:26 | 1494554 Overflow-admin
Overflow-admin's picture

I completely agree with your logic. No more artifacts*.

 

* Manipulation will still be possible but much harder to hide.

Tue, 07/26/2011 - 12:23 | 1494796 Clint Liquor
Clint Liquor's picture

The World is already on a Gold Standard. Every currency is valued against Gold on a minute by minute basis. No currencies are redeemable by governments for Gold, but they are on the street. As long as you can trade fiat for Gold there is a Gold Standard. It up to you whether or not you want to participate.

Tue, 08/23/2011 - 23:00 | 1593377 karmete
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