Posted on 06/27/2016 1:50:10 PM PDT by Rusty0604
A little more than that.
Go back to the gold standard?
Yeah, that would be great - if we HAD any.
What good is gold that is never seen?
True.
Kind of a big deal when a former head of the Federal Reserve says this.
Thanks.
That’s right, and an external standard like the gold standard helps mitigate political meddling.
I wouldn’t say the dollar is so much backed by our goods and services as the dollar measures the price values of our goods and services. All you’re doing is fixing a standard value measurement to the dollar, like fixing a standard measurement to your scales at home. When you don’t change the standard measurement of your scales at home, you can rely on what’s its telling you about whether you’ve lost or gained weight. In the same way, when you don’t arbitrarily change the relative measurement of the dollar, you can rely on prices giving an accurate reading of value.
Not sure that matters. All you’re doing is fixing a standard value measurement to the dollar, like fixing a standard measurement to your scales at home. When you don’t change the standard measurement of your scales at home, you can rely on what’s its telling you about whether you’ve lost or gained weight. In the same way, when you don’t arbitrarily change the relative measurement of the dollar, you can rely on prices giving an accurate reading of value. Not sure you have to have the gold locked up somewhere. The only good that might do is possibly keep the value of the gold static I guess, but I don’t think it would. Even on the gold standard, the gold itself would change relative value, but its relative to the market and dollar prices are still reliable. Reliable prices, like reliable weight measurement, is the point of having an external standard like the gold standard.
That’s right, and an external standard like the gold standard helps mitigate political meddling.
...
It helps, but the crooks can usually find a way around it.
We were on the Bretton Woods system for a while which backed the dollar with gold but only in the foreign exchange system. When France demanded gold for their dollars, Nixon had to put an end to the system, and the inflation problem we had in the 1970’s was the result. It wasn’t Nixon’s fault, but the fault of all the spending the crooks did and were able to get away with because the dollar had a propped up artificial value. (The conversion rate was manipulated by the crooks in DC.)
I think it can make sense to back a currency temporarily in order to restore confidence in a currency, but other than that it gives a false sense of security in the long term and adds costs to the monetary system.
FWIW.
People have been trying desperately to find an alternative to the centrally controlled currencies since 2008.
BitCoin has made a number of advances, but it has failed to gain the traction needed for a wide spread adoption.
I’ve been say for years now that what Bitcoin actually is trying to accomplish (whether they realize it or not) is to “Make Gold practical”, You can buy all the Gold you want but it’s nearly impossible to spend it in a practical manner.
Enter “BitGold”.
BitCoin is dead as an alternative because there is nothing behind it.
BitGold has solved this and is making everyday transactions possible with the confidence necessary to conduct business.
http://bravenewcoin.com/news/bitgold-connects-blockchain-platform-to-9-major-us-banks/
All a standard like the gold standard does is give a relatively fixed value to the dollar. It’s like your scales at home that are set at sixteen ounces to the pound. If you changed your scale to seventeen ounces to the pound, you wouldn’t weigh any less, it would just appear that way. Same with a fixed external standard like the gold standard to the dollar. Keeping a relatively fixed standard allows a much higher degree of confidence in prices between buyers and sellers.
Whatever the fixed standard is, it needs to be external from the currency itself.
The way I see it, all a standard like the gold standard does is give a relatively fixed value to the dollar. It’s like your scales at home that are set at sixteen ounces to the pound. If you changed your scale to seventeen ounces to the pound, you wouldn’t weigh any less, it would just appear that way. Same with a fixed external standard like the gold standard to the dollar. Keeping a relatively fixed standard allows a much higher degree of confidence in prices between buyers and sellers.
Gold, in and of itself, is worthless as a standard for monetary policy.
Yes, it has historical value but in reality it is all perceived value.
From my seat, the only thing that can be used as a basis for any currency is Energy.
Oil, coal and whatever other thing that produces energy.
Measured in BTUs.
Energy is life.
Energy is needed to conduct business and its usage can be measured.
While many people idealize a Gold standard at the end of the day we are on an “ENERGY STANDARD”.
Energy is to only thing that can measure life and business expansion and contractions that would provide any real basis for value.
Maybe it’s just me.
Well, I always thought that if you were on the gold standard, you had to have the gold to back up the paper in circulation.
And by your reckoning, wouldn’t the price of gold have to be fixed? Otherwise, you’d have to recall dollars as the price of gold fluctuated.
Right?
Look, I’m not a monetary guru. So what do I know?
Keep it simple. It’s not the value of gold that matters. Its more it’s permanence. Again all you’re doing is fixing a measurement standard, like the wight measurement on your bathroom scales. The measurement itself isn’t the point. It’s the fact it’s fixed and reliable, the way you always know that a pound is always sixteen ounces, so you can tell whether you’ve gained weight or lost weight - the scale has a higher reading because you actually gained weight, not because you fooled yourself by changing to measurement of a pound on the scale.
In the same way buyers and sellers can rely on prices being an accurate measure of the relative value goods and services, knowing that changes in prices is not because somebody has changed the measurement of the dollar - changing the measurement of the dollar doesn’t change the intrinsic value of the goods and services, it only fools you into thinking intrinsic value has changed.
No all you’re doing is fixing a standard measure for a dollar like you have a standard measure for your bathroom scales. Changing the measurement on your bathroom scales doesn’t cause you to loose or gain weight. Keeping a fixed measurement helps you to know whether you’ve lost or gained weight. Same with a fixed external standard for the dollar like the gold standard. It means that buyers and sellers can safely rely on a change of prices due to a change in the intrinsic value of the goods or services, not because the measurement of the dollar has changed.
I understand that, but Gold in and of itself, is an arbitrary standard.
The only real indicator of economic activity is the consumption of energy.
Well, that is really a separate issue from having a fixed external standard for the dollar.
I think they were trying to tie the quantity of money to the supply of gold on hand and I think that has since been refuted as a desirable way to meter out the money supply.
Well, the measurement standard of the dollar does not determine economic health just like the measurement standard of you bathroom scales does not determine your physical health. Your bathroom scales simply has a fixed measurement to give you accurate reading in changes to your physical condition. There’s no intrinsic value in the measurement standard itself. And again, changing the measurement standard doesn’t change your condition but does create confusion about your condition.
Likewise, there’s no intrinsic value in the gold standard. Gold is simply a relatively fixed external commodity that can provide a relatively fixed standard to give buyers and sellers an accurate reading of price levels.
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