Posted on 12/10/2010 6:48:02 PM PST by Tolerance Sucks Rocks
I thought every dollar had to be backed by gold. Such a requirement would make inflation less likely, because without such a requirement, you could certainly print dollars with abandon (kinda like what is happening now).
For all we know, the Red Chinese could be holding it as part of the collateral for all the money that they have loaned us.
You would destroy the Dollar and our economy in one fell swoop.
.....The dollar was still convertible among central banks until Nixon......
Who cut the link and quit selling gold for $35/oz because the market price was $43 and our gold was being carried off by the truck load
It is interesting this thread says the accounting valuation of the reserves is $42 or near the value on the day Nixon shut the gold window.
I have always been hesitant to buy things of great value on e-bay. Besides dealers, are there any other venues (clubs) where one can buy precious metals directly and in person from individuals thus bypassing the middleman?
Nice image. Do you have one of the flip side?
https://www.theworldreserve.com/images/details/CUR50BNUG.jpg
Click the URL. I cannot post the image.
“I thought every dollar had to be backed by gold. “
That’s a common misconception. Every dollar must be convertible to gold upon demand, but that’s not the same as having gold back each dollar in existence. The monetary base is gold under a gold standard, with a structure of credit money built on top of it. The growth of that credit money is restrained by the fact that it can be redeemed for gold, which is likely to occur when the public thinks that an excessive number of dollars have been created. As long as there isn’t an excessive issue of credit money people are content to keep their savings in dollars rather than gold. You can see that process in action today.
“You must have missed my question - given the framers disastrous experience with paper currencies fresh in their minds when they wrote the constitution and bill of rights, the legislation requiring gold and silver to be the only lawful money, etc., &c, don’t you think it a bit queer that Roosevelt got away with that? “
Not really. Lincoln suspended the gold standard and issued an enormous amount of fiat currency during the Civil War, the greenbacks of the US Notes series. The gold standard didn’t return for 17 years.
The vast majority of Americans didn’t have one gold coin to turn in. The average household income of that era was, prior to the hard years of the Depression, less than $2,000 per year. Gold coins were largely held by banks as part of their reserves.
“For my part, there may be good reasons to do, or not do, certain things but why the secrecy and pseudo-legal mumbo jumbo?”
I don’t know that there was any secrecy about it. I think that idea comes mostly from the tales of modern conspiracy fans. The legal issue came from those who had gold clauses in their contracts and who didn’t want to be paid in cheaper dollars. But that was a moot issue since during the Depression dollars were much harder than before, not cheaper. Gold remained the monetary base. But revaluing it while it was still in circulation would have given a 30% windfall to the tiny minority who held gold, and this would likely have been extremely unpopular considering the desperate conditions of that time. Whether that was the proper thing to do you’ll have to decide. I’m just trying to describe it, not judge it.
There’s plenty of Supreme Court decisions that I dislike but I haven’t noticed that my dissenting opinion has made them see the error of their ways even once.
The reasoning of the Supreme Court in 1935 is that the Constitution grants Congress the power to regulate the monetary system and abrogating the private ownership of gold falls within this power. Google “gold clause cases” and you can find plenty to read about the issue.
The market price had become $43 because neither Kennedy nor Johnson nor Nixon was willing to address Triffin’s Dilemma, which would have required an American recession and replacing the dollar as the world’s reserve currency. It was primarily the French who were cashing in their dollar holdings for gold.
Ok, thanks. Added it to our collection.
Nam Vet
Since Biblical times, the price of a kilo (aprox) loaf of bread has run between about 300 and 388 loaves per ounce of gold. The latest hyperinflationary induced famine was Zimbabwe, as I'm sure you all know. You probably saw all the news stories about people panning for gold to buy bread.
If you recall the price, it was 1 tenth of a gram of gold per loaf. At 31.103 grams per troy ounce, that looks like it is about 311 loaves per ounce. Fits right into the historical norms, but at the more expensive end of the scale. The same works for housing and even the Dow Jones Industrial Average.
Stop thinking the way the media, bankers and politicians want you to think about money.
Nam Vet
It’s nor “conspiracy”, it’s all in the public record in fact and very well documented. Of course nobidy wants to be paid back in depreciated money, but that’s not news. What’s important to note is the repudiation of gold clause contracts - what you’re really talking about is the unit of account with respect to the rule of law, etc. You certainly should be able to judge that because it is a form of theft under color of law. Long term lease contracts are often 99 years. Expressed in terms of gold or some objective standard makes sense. Otherwise, inflation eats away at the currency value and end up with absurdities as renting whole office buildings for a song. See where I’m going with that?
See: Trostel v. American Life and Casualty
Yes, those are them.
The problem arises because coins are required to have a nominal face value, when the metal price exceeds the face value it becomes profitable to sell the coins for scrap. This is why current law prevents scrapping nickles and cents, but not silver coinage - the latter having been demonetized and replaced with clad material.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
