[Jack Black]

You wrote: "All of the gold ever mined is valued at $3 Trillon as of April 2006. There isn't enough gold and silver in the world to go back to the gold standard. That was true in the 1920's when we were taken off the gold standard." I don't see the connection. We could establish the standard as whatever we want. We clearly can't do $20 an oz. Any I assume your $3 Trillion is based on the $600 average price lately. To set the new price for gold we could take what ever amount of new money we felt we needed (and it would be a good time to retire a lot of debt by not making it convertable).

According to this chart M1 is about $1 Trillion. M0, which is what we really need is even less. Call it $500 Billion. (total SWAG). There are 147 million ozs of gold in Ft. Knox (according to the first site on the google seach - again this is back of the envelope stuff) 500,000,000,000 dollars divied by 147,000,000 = a gold price of $3,400 an oz. So one dollar in the NewGold exchange rate would equal 1/3000 th of an oz. That's too little to coin, but so what.

[piasa]

We could establish the standard as whatever we want. We clearly can't do $20 an oz.

Just slapping whopping big values on gold and silver would make all our electronic equipment pretty darn expensive, seeing as how we use things like gold and silver to make these products.

Perhaps we should just go back to the ancient cocao bean monetary system.

[Yo-Yo]

So what do you wish to do, start a new gold standard where one dollar is 1/3000^th of an ounce? Then when we need more money to support a population of 350 million people, we make a dollar 1/4000^th of an ounce?

The whole point of the $35 an ounce gold standard was that the amount of gold that a dollar represented never floated, it was always fixed over time, and the paper note was always redeemable for real gold.

The reason we're off the gold standard was during the Depression FDR made it illegal for US Citizens to own gold, other than jewelery. He stopped the minting of gold coins, and ended the private redemption of paper notes for gold or silver.

We still maintained the $35 an ounce gold exchange with foreign governments, but in the early 70's there was a run on our gold reserves by Great Britian and others who wanted to exchange their dollars for gold. There simply wasn't enough gold in Fort Knox to cover all the foreign held notes, so Nixon ended the foreign exchange of gold, putting us on a fiat currency.

If the amount of gold that a dollar represented were allowed to float, and were not convertable in the manner you assume, the dollar remains a fiat currency and the "gold standard" as you describe would be a myth.