Posted on 12/26/2015 12:25:25 PM PST by Isara
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So what is Mr. Cruz's "one big problem"? It turns out to be that he's for honest money, ideally a dollar defined in terms of gold. That is, he's got the same problem that dogged those notorious losers like, to name but a few, Geo. Washington, John Adams, Thos. Jefferson, Andrew Jackson, Grover Cleveland, Wm. McKinley, Thos. Woodrow Wilson, Franklin Roosevelt, Dwight Eisenhower, John Kennedy, and Ronald Reagan.
This is a bizarre argument that puts the Huffington Post - the dispatch is by its senior political economy reporter, Zach Carter - in the company of, say, Richard Nixon. It was Nixon who, in 1971, closed the gold window at which America redeemed dollars presented to it by foreign governments. He ushered in the age of fiat money. Huff Post notes that "no country on Earth now relies on a gold standard for its currency."
Not at the moment, at least. Huff Post cites a 2012 survey by the University of Chicago that found among a group of economists none who support a gold standard. But which group of economists? It turned out to be composed entirely of individuals who oppose the gold standard. Another way to state it would be that a survey of economists who oppose the gold standard found no support for the gold standard....
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This, in any event, is an opportunity for Mr. Cruz - a chance to stand apart from the rest of the Republican field, to side with the American Founders, and to campaign on constitutional fundamentals....
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After all, it was not to economists that the Founding Fathers delegated the constitutional monetary powers and disabilities. No, it was to the Congress of the United States. That is the constituted body. The Founders understood that the monetary power involves more than the dismal science - there are legal, commercial, regulatory,...
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(Excerpt) Read more at nysun.com ...
Economists hate the gold standard because fiat currency creates a need for economists.
There IS a gold standard whether the sheeple, Obamatrons and GOPers want one. It will win out in the end, and the they will all be left with worthless green paper.
Gold makes it pretty hard to create and erase wealth with the stroke of a pen.
We can agree on that.
>>Gold makes it pretty hard to create and erase wealth with the stroke of a pen.
Exactly. So you don’t need “experts” inventing new ways to create money and funnel it to the right people so the hoi polloi don’t get their hands on it and buy stuff.
“There IS a gold standard....”
Exactly. Unfortunately, people have been duped into believing in fiat.
Wealth creation and elimination at a whim is what carbon credits are all about.
If we go on the gold standard, how will Hilary keep all those campaign promises to her donors?
There is no question but that we need a substantially sounder dollar. But to return to a gold standard now would throw us into fiscal chaos. Gold is in excess of $1,000/oz. The Fed needs to gently dry up excess liquidity over the next five to seven years or so.
Maybe not just gold, but a basket of metals. Gold, silver, copper, platinum, aluminum etc.
Who knows where the US gold is/went, the amount, etc.? I only know how much and what I own.
Who owns the gold now? Does it matter? Sure it does. If I’m not mistaken the US owns but a fraction of the world’s supply. I think I understand the intellectual arguments for a gold standard ( thanks to many FReepers who were kind enough to ejimacate me), but I can’t get past that belief that it would be disastrous.
FYI
His BIG problem is taking pro-amnesty money from the Club For Growth and explaining away his Credit Suisse Group (money launderers for the FIFA crooks) donations.
Gold standard? PULEEEEEEEEEZE!!
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The problem with the gold standard is the real value of gold. The real value of gold is not its scarcity, but it is its real utility.
Unless your G o l d f i n g e r...da DAH da...
Exactly, that’s why I’m not supporting him. Nothing to do with the gold standard although I’d be happy if we went back to it.
Also, a lot of the US' economic strength stems from the Dollar being the global reserve currency ...that alone enables the US Gov to print money like a drunk Zimbabwe, and the World has to accept and swallow it (and even say thank you). As long as the musical chair game is flowing along smoothly, and the music is playing, the US can print debt like a nonsense and everything goes forward without a hitch (even as the debt grows to noxious levels). Some day the music will stop, but NEITHER DEMOCRATS AND REPUBLICANS are going to make the music stop during their term in office by proactively implementing a return to the gold standard. It would trigger an economic implosion, and that party would not be re-elected for a generation. Anyway, there's not enough gold (real physical gold) to support the US economy and money out there (and note there are more US Dollars outside the US than within the US).
Think of it another way ...there are several exchange traded funds that invest in gold, and what's ironic is that even in those ETFs most of the gold (by some estimates over 90%) is 'paper' gold that is not backed by actual physical gold. If there's insufficient gold for ETFs, we're supposed to believe there is enough for an economy that is 'worth' many trillions of Dollars?
I said it is impossible (literally impossible) to return to the gold standard under the current economic system, and that anyone saying they can make it happen is (a) lying to you, (b) stupid (or to be PC, let me say misinformed), or (c) the person is being misquoted (either due to nefarious purposes, or just a simple misquote due to taking the person's statement out of context). It doesn't matter if it is the Pope, Reagan, JFK, the Easter Bunny ....doesn't matter. Anyone who says they can do it can be categorised under one of those three categories.
Now, the only way a return to the gold standard is possible (as I said, it was 'impossible under the current economic system') is if the global economy collapses, everything goes to hell in a hand basket, and whatever economic mechanism rises from the ashes decides to pin whatever it uses as money on gold. That will be a smaller poorer economy than present, and one that is forced to pin money on gold since it cannot trust fiat currencies and there's no dominant and (importantly) reliable global reserve currency. In such a TEOTWAWKI situation it is possible for the gold standard to rise from the ashes.
Apart from that, it is IMPOSSIBLE for it to happen as America and the World at large would have to abandon the Dollar as the global reserve currency as there would simply not be enough PHYSICAL gold to back the Dollars in circulation.
To conclude, as someone who works in the global financial markets I always have a mix of a laugh and a vomit reflux when I read what passes for economic theory. I fully understand why people would want a return to the gold standard, but I am so perplexed by how many think it is something that is doable. America, and the World, have been mainlining strong dope for decades, and the expectation that they can simply forgo fiat money (and the ability to abracadabra debt, liquidity and all sorts of other nifty - at least in the short term - tricks) and return to the hard and firm gold standard makes me think that those believing that is possible are deluded (and maybe deluded about other things as well).
The short answer is as follows - barring a global economic collapse, a return to the gold standard is impossible. Any politician saying that is being misquoted, deluded or a liar. Anyone. Any political party that would actually implement it would oversee the collapse of the US economy and the Dollar losing its status as the dominant global reserve currency.
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