Posted on 04/10/2010 6:17:30 AM PDT by Rutles4Ever
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If you want to rob a bank and get away with it, hire the guy who keeps the books. I wonder what turned him.
Oh, we were paying attention and voted for he would brought home the goods. The Greatest Generation and their brood demanded one heck of a price for their service and passed along that expectation to we who have followed, but we and our brood will be the ones paying the bill.
Can easily be substituted with George Washington, Thomas Jefferson, etc.
I don’t see it happening for the simple fact that people will simply refuse to pay the debt. 30 years from now people will agree to pay off debts incurred that they had no say in creating? I see a collective “GFY” coming soon where Gen X, Gen Y and their offspring will tell the Boomers that they will not own their entitlement obligations as well as those incurred by state and union pensions that blow up.
that would be outright confiscation of personal property on the part of the government and likely enough to cause a revolt.
Since Nixon repudiated any connection between gold and the dollar in 1971, we are now using what is a “virtual currency”. It literally has no concrete value except what it can buy and except what time-value (interest rate) the market will bid for it at a given moment.
This would not be so bad except governments (because all are doing it, not just the US) are creating money out of thin air. They are addicted to doing so. They have designed their social programs to depend upon the constant expansion of the money supply. What they have planned is for the constant inflation of the value of money.
If some central bank decide to pull out of this scheme and to tie the value of its currency to a basket of commodities or to gold itself, here is the simple truth:
There is no very much gold (as expressed in ounces) compared to the ocean of dollars, or Euros, or any other currency. Therefore, in order to “monetize” or “express” the wealth held in, for example, Euros, the value of gold as expressed in Euros would have increase by a factor of 10x or 20x!
If the ECB were to tie the Euro to gold, it would have to do so overnight and all at once. That would mean the game of borrowing and inflating paper and electronic money would be over. In an instant, the world’s trading powers would start to use that new currency and dump their fiat ones, because after all who wants to hold a piece of paper backed by pieces of paper when they can hold a piece of paper that is a warehouse receipt for a that much gold?
The US Dollar as a world currency would be instantly replaced, and the price (in dollars) of anything we had to import would instantly jump, and start to creep upwards dramatically.
I first saw this idea on the blog fofoa.blogspot.com. He calls the concept “freegold”. See the article 100:1, that is after you read the most recent article on gold and money.
“Freegold” has the additional advantage for Europe that it would allow them to pay down their own debt in a one-shot transaction. Dump the US, destroy it as an economic power, make your own currency the medium of global exchange and pay down your debt? What’s to lose except it would kill export sales to the US. Maybe there will be a time when that is not such a bad thing.
People will not revolt. Most are Christians who will not fight. And the Left has millions of minorities, labor unions and Obama friends who are willing engage in domestic terrorist.
.....Therefore, in order to “monetize” or “express” the wealth held in, for example, Euros, the value of gold as expressed in Euros would have increase by a factor of 10x or 20x!.....
You have it right and something like that will happen. The multiples are huge. The key to the thinking is not to value gold in existing currencies, but to value currencies in a fixed amount of gold.
When gold becomes the standard, there is no way to calculate the ratios. The value will be determined when the dust settles
Yes exactly! I am only suggesting that when the dust settles, that gold will have jumped by that much, at least! It is stunning when you do exactly as you have suggested: to view gold as the real “money” and view today’s fiat money in terms of the real thing.
“If you want to rob a bank and get away with it, hire the guy who keeps the books.”
The front door is the poor man’s way into the bank, as a customer or robber.
When it gets soo bad, they will fight.
>>Most are Christians who will not fight.<<
Will not fight who?
Bull.....
In 1932 a one ounce gold coin was $20 (Twenty dollars). The spot price was $20.69 and had been approximately so for a hundred years. Roosevelt devalued the dollar to $35 in 1933 and it stayed there until the US went off the gold standard and began issuing fiat currency in the nineteen seventies. (When a gallon of gas was twenty cents, the average home price in Southern California was under $20K and a new, fully loaded, full sized American car was around $4K)
Yes. I think gold may well hit $5,500 per oz. Or more properly, the dollar will sink to $0.0036 compared to its value at the inception of the Federal Reserve.
BTW, the current value of the dollar, compared to its value from the inception of the Republic through 1932 is $0.018. Not quite two cents
The proposal for the Federal Government to “borrow” 401K, IRA and other savings accounts is already written-up and ready for implementation. This topic has been discussed several times on FreeRepublic and if you research it you can find hard proof that what will eventually be the proposed legislation already exists. This has been a dream of the Left’s for many years. It’s only a matter of time before they come forward with the pitch, which will be something like this:
“Our nation is facing a crisis of epic proportions caused by the greed of those who put all of their faith in the unregulated free-market. Unfortunately, in times like these Americans must come together and collectively make sacrifices in order to right the wrongs caused by a greedy few. To prevent certain economic disaster, we have no choice but to call on those who were fortunate enough to earn more than they needed and were therefore able to save for retirement (taxfree, I might add) to temporarily lend their 401k, IRA and other savings accounts to the Federal government so that we can meet our most pressing obligations. Those accounts hold trillions upon trillions of dollars, which right now are only serving to line the pockets of fat cat bankers and mutual fund managers. In exchange, we will offer those patriotic Americans a guaranteed fair return on their money, backed by the faith and credit of the United States, of course. We are forced to take this unprecedented step, so that we can help those who have not been as fortunate and who played no role in causing this disaster. Anyone who cannot see the fairness of this proposal is clearly thinking of only their own selfish interests, and not of the common good of their fellow citizens. This is not something my administration wants to do, it is something that we are forced to do and I ask for your support in these unprecedented times.”
And in one fell swoop, they will confiscate trillions of dollars in savings from hardworking Americans and use it to pay for yet more entitlements and to buy themselves a little more time. Their only goal is to stave off catastrophe until they are out of office and have had enough time to amass a personal fortune through book deals, lobbying fees, public speaking fees and serving on the board of giant corporations.
It’s coming... you can bet on it.
But, when the fan becomes soiled gold can’t be eaten, worn or used to heat your house.
Gold isn’t there to help YOU survive a crisis, it’s there to help your wealth survive a crisis. (Which is not to say that in just about every portion of just about every crisis, gold has bought food, clothes, and fuel).
I noted that the ONE thing he didn’t mention at all is “debt repudiation.”
While unpleasant, this is the fastest, and easiest way for the nation to get back on its feet.
And only those people most responsible for our current situation are willing for our nation to suffer for decades, just so they can continue their merry japes.
What happens when the US renounces its debt? To start with, import trade ends. Except for commodity swaps, like food for oil, the US will get no more foreign made goods. And I very specifically mention oil, because that is our #1 import.
Right now, in the US, there is a normal backlog of crude oil waiting to go to the refineries. There is also the Strategic Petroleum Reserve, which has about a six month supply of oil for critical functions. Between the two, this means that the US has between six and eight months to get every unused oil well in the country pumping. That may be enough time, as long as the government doesn’t mess around.
Gasoline will jump to maybe $8-10 a gallon.
Those parts of the stock market dependent on imports will crunch, but because everything America previously imported will now have to be made in America, there will be a big jump in new industries.
The days of deficit spending will be over. The government will not just have to have a balanced budget, but a surplus budget. This means an end to Social Security, Obamacare, Medicare, and Medicaid. As well, Defense will have to be severely cut, perhaps as much as 50%, as well as the overall size of the US government.
This will mean the recall of the vast majority of US personnel stationed overseas.
Internationally, there will probably be a massive depression, as socialism dies all at once, everywhere.
Fortunately for the US, right now we have a housing and food surplus, both of which are relatively stable, and will do much to alleviate suffering.
The end result is that debt repudiation will result in 5-10 years of economic downturn, and the US will emerge from it with much better footing. But if the government tries the hyperinflation and re-denomination of our currency route, we make look forward to 30 or more years of misery, with America left impoverished at the end.
But the opposition to the gold standard in any form-from a growing number of welfare-state advocates-was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.... Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. ... The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.
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