Hello,
Yes, I meant that via the gold window, the market would settle on the right dollar price of gold as people exchange their gold for dollars or vice versa. I do believe if this were established today, many would come to the gold window and exchange dollars for gold, thus settling on a price of gold under 1,000 per ounce. I say this because gold above 1,000/oz is a recent phenomenon, and that we haven’t seen the inflation across all goods/services yet (it starts in commodities and acts like a wave). This is the reason the banks were in so much trouble in 08 and now, because they rely on lending (lender gets screwed when money is devalued). Also, dollar stays weak because of 0bama’s (AKA Zer0) crap economic policies.
Thanks
A couple notes:
Gold’s current price is below the all time high adjusted for inflation
Inflation is actually about 4% currently. MIT runs a study on this based on billions of items
http://bpp.mit.edu/