Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Beagle8U

I don’t claim to be an economist, but I assume if gold were monetized it would tend to damp price swings.

But maybe it would make them worse. Don’t know.


42 posted on 01/09/2012 7:50:39 AM PST by Sherman Logan
[ Post Reply | Private Reply | To 38 | View Replies ]


To: Sherman Logan
I assume if gold were monetized it would tend to damp price swings.

On the contrary. A single commodity currency would result in easier manipulation and continued price swings. For us it may be currency, but to other countries that actually have a pretty large gold production operation, it is just a commodity. Let's take South Africa (a very large gold producer for example). Knowing that our currency is based off gold and we get a lot of it from them, they can hold supply or dump supply on the market at their whims in order to get the price or demand they want. They could hold off supplying the market for a long time, resulting in less supply for greater demand (ie higher prices). Then, sell a lot to the market at once at these higher prices- lining their market and 'popping the bubble' causing the price to fall. Now imagine these games with every major gold supplier? There is a reason no major country ever has been able to keep a single-commodity based currency.

The only way it could be practical and secure is to first highly ramp up our domestic mining operations to where we can control the market more.

49 posted on 01/09/2012 7:57:20 AM PST by mnehring
[ Post Reply | Private Reply | To 42 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson