stdreb27
Active Member
Quote:
Originally Posted by mantisman51 http:///t/390156/toms#post_3453966
I never said it added to the debt, thus the AND between the two statements. The price of gold fluctuated up and down based on economic output the whole time we were on the gold standard, so history shows that to be a moot point. There is not T notes to back up every $ printed. I think you might be confusing debt, deficit and planned inflation. But it makes no difference. I was merely pointing out that on the gold standard the currency must be worth the gold in reserve and that the price of gold swung widely during the period we were on a gold standard.
NEVER did I say in any way, that government bonds back up a federal reserve note...
We've gone off an on some sort of gold standard several times in our history... (basically when we went to war and needed to borrow money pre-federal reserve...) Look this is once again going to be a HUGE oversimplification. You're backing into one of my main points, and issues with a gold standard... Particularly last century, in a nut shell, what we did was set our currency to a fixed gold cost. Then all the countries in the accord, set a fixed exchange rate between our currency and theirs. The problem ended up being. It took huge amounts of cash, to keep these exchange rates at their fixed levels. And that ended up being the downfall of the system. Then they would go out and say ok, well gold was worth $400 dollars an oz now it is worth 800. Oh and you can't own gold, you sell it to the government. The kicker ended up being that these other countries would have to dump a lot of cash into their system or suck it out dependent on whether their currency was increasing or decreasing in value vs the USD. Basically the dang value of gold fluctuated so much during that gold standard system that it crashed the system...
But by definition a Gold standard system would require you to have a piece of paper that hypothetically be able to be redeemed for gold. If not, you'd have no faith in a system...
I really do think that with a single currency would work fine with a gold standard. The problem is when you have to valuate that currency vs other currencies. And that is where you run into market crashing issues...
Originally Posted by mantisman51 http:///t/390156/toms#post_3453966
I never said it added to the debt, thus the AND between the two statements. The price of gold fluctuated up and down based on economic output the whole time we were on the gold standard, so history shows that to be a moot point. There is not T notes to back up every $ printed. I think you might be confusing debt, deficit and planned inflation. But it makes no difference. I was merely pointing out that on the gold standard the currency must be worth the gold in reserve and that the price of gold swung widely during the period we were on a gold standard.
NEVER did I say in any way, that government bonds back up a federal reserve note...
We've gone off an on some sort of gold standard several times in our history... (basically when we went to war and needed to borrow money pre-federal reserve...) Look this is once again going to be a HUGE oversimplification. You're backing into one of my main points, and issues with a gold standard... Particularly last century, in a nut shell, what we did was set our currency to a fixed gold cost. Then all the countries in the accord, set a fixed exchange rate between our currency and theirs. The problem ended up being. It took huge amounts of cash, to keep these exchange rates at their fixed levels. And that ended up being the downfall of the system. Then they would go out and say ok, well gold was worth $400 dollars an oz now it is worth 800. Oh and you can't own gold, you sell it to the government. The kicker ended up being that these other countries would have to dump a lot of cash into their system or suck it out dependent on whether their currency was increasing or decreasing in value vs the USD. Basically the dang value of gold fluctuated so much during that gold standard system that it crashed the system...
But by definition a Gold standard system would require you to have a piece of paper that hypothetically be able to be redeemed for gold. If not, you'd have no faith in a system...
I really do think that with a single currency would work fine with a gold standard. The problem is when you have to valuate that currency vs other currencies. And that is where you run into market crashing issues...
