Lon
Well-known Member
- Location
- Central California
Why Or Why Not?
Should the US go back on the Gold Standard?
- Thread starter Lon
- Start date
rkunsaw
Well-known Member
- Location
- Clarksville, Arkansas,USA
I'm not sure the U.S. owns any gold.
The U.S. used to store their gold in Fort Knox and the Federal Reserve Bank in New York. I think the Fed in New York held more gold than Fort Knox, but wouldn't swear to it.
As for going back on the gold standard, I think this may be a bad idea. Having our currency tied to the value of gold can be detrimental because of the fluctuations, just like any commodity does. As gold prices fall, so does the value of the dollar. It would make printing money harder to do. Right now, we do not have enough in gold reserves to support the amount of dollars on the market. Also, if we were on the gold standard again, a lot of those that could afford to do so would be hoarding gold. I like the idea of having dollars backed by the integrity of the U.S. to pay our bills, unlike many other countries that cannot, like; Greece and Russia. If Russia was to lose their oil supply the Ruble would crash in a hurry and their entire economy would collapse. I forget under what President, the U.S. forgave Russia from paying back billions of dollars they had borrowed from the U.S. to pay for their wars.
Only until recently did China pass the U.S. as having the largest economy and it's only by a hair. If the U.S. went back to the gold standard, we wouldn't be able to have the amount of dollars on the market that we have now, or our dollars would be so far devalued that a child could buy them with their allowance. Sort of like the Peso.
As for going back on the gold standard, I think this may be a bad idea. Having our currency tied to the value of gold can be detrimental because of the fluctuations, just like any commodity does. As gold prices fall, so does the value of the dollar. It would make printing money harder to do. Right now, we do not have enough in gold reserves to support the amount of dollars on the market. Also, if we were on the gold standard again, a lot of those that could afford to do so would be hoarding gold. I like the idea of having dollars backed by the integrity of the U.S. to pay our bills, unlike many other countries that cannot, like; Greece and Russia. If Russia was to lose their oil supply the Ruble would crash in a hurry and their entire economy would collapse. I forget under what President, the U.S. forgave Russia from paying back billions of dollars they had borrowed from the U.S. to pay for their wars.
Only until recently did China pass the U.S. as having the largest economy and it's only by a hair. If the U.S. went back to the gold standard, we wouldn't be able to have the amount of dollars on the market that we have now, or our dollars would be so far devalued that a child could buy them with their allowance. Sort of like the Peso.
Lethe200
Senior Member
- Location
- San Francisco Bay Area
At one time the US owned over 80% of all gold reserves. To this day, although the Treasury keeps it a very closely guarded secret as to the exact amount, experts estimate the US still holds 50-70% of the world's gold reserves.
By contrast, China owns....less than 3%.
The US by itself has more gold than the next 5 nations combined.
By contrast, China owns....less than 3%.
The US by itself has more gold than the next 5 nations combined.
Josiah
Senior Member
- Location
- 50 miles east of Cincinnati, OH
I just finished reading "Capital in the Twenty-First Century" by Thomas Piketty. He dismisses the idea of returning to the gold standard as absurd. He convinced me.
The "Gold Standard" was instituted to maintain the "value" of the basic currency unit, our Dollar, constant. IOW, the value of gold never varied, it was always $20 per ounce of gold. It worked well, until two significant factors intervened: the ever-expanding economy, fed by ever-increasing numbers of people present, made it obvious that the amount of gold locked up by govt., wherever it was kept, could not be increased constantly, in order to "bear" one ounce stored for each and every $20 in circulation. Something had to "give". It gave when Franklin Delano Roosevelt had the $ to gold ratio changed: he remanded the "value" of the dollar such that it then took $35 to buy one ounce of gold. He thus "devalued" the American currency, overnight, by a ratio of 15/20, which meant that the dollar was suddenly worth 75% less than it had been.
In reality, gold is actually a truly amazing commodity. In the early 1980s, my wife took a job as Purchasing Agent for a bullion & currency company in Phoenix. She learned that, way back when Samuel Colt designed his famous six-shooter, those guns sold for 1 ounce of gold. 100 years later, a similar handgun sold for the equivalent value of 1 ounce of gold. Similarly with a whole lot of other commonly-needed consumer items: it "fit" also for a good quality Men's suit of clothes! This meant that the "purchasing power" of an ounce of gold did not CHANGE in 100 years!
Today, we have a hodge-podge of economic currency considerations going on. A number of economic "wizards" have stated that the two things in American economic history which did the most to detract from America's Stately position in the world economy were: Going OFF the "Gold Standard", and, creation of the "Federal Reserve System". imp
In reality, gold is actually a truly amazing commodity. In the early 1980s, my wife took a job as Purchasing Agent for a bullion & currency company in Phoenix. She learned that, way back when Samuel Colt designed his famous six-shooter, those guns sold for 1 ounce of gold. 100 years later, a similar handgun sold for the equivalent value of 1 ounce of gold. Similarly with a whole lot of other commonly-needed consumer items: it "fit" also for a good quality Men's suit of clothes! This meant that the "purchasing power" of an ounce of gold did not CHANGE in 100 years!
Today, we have a hodge-podge of economic currency considerations going on. A number of economic "wizards" have stated that the two things in American economic history which did the most to detract from America's Stately position in the world economy were: Going OFF the "Gold Standard", and, creation of the "Federal Reserve System". imp
