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Forum Post: should we switch to the gold standard?

Posted 2 years ago on Jan. 30, 2012, 9:07 p.m. EST by vothmr (82) from Harrisonburg, VA
This content is user submitted and not an official statement

there is roughly 1 trillion dollars in hard currency in the US and 10 trillion worth of currency plus checkings, savings, money market, etc. the current US holdings of gold are valued at around 270 billion. so if you do the math, to convert it all to the gold standard, for every dollar you currently have, you would be entitled to 2.7 cents worth of gold. hows that for depreciation?

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4 Comments


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[-] 1 points by ThunderclapNewman (1083) from Nanty Glo, PA 2 years ago

We're not on the gold standard.

http://en.wikipedia.org/wiki/History_of_the_United_States_dollar

This from the wiki article linked above:

Fiat standard

Today, like the currency of most nations, the dollar is fiat money, unbacked by any physical asset. A holder of a federal reserve note has no right to demand an asset such as gold or silver from the government in exchange for a note.[9] Consequently, some proponents of the intrinsic theory of value believe that the near-zero marginal cost of production of the current fiat dollar detracts from its attractiveness as a medium of exchange and store of value because a fiat currency without a marginal cost of production is easier to debase via overproduction and the subsequent inflation of the money supply.

In 1963, the words "PAYABLE TO THE BEARER ON DEMAND" were removed from all newly issued Federal Reserve notes. Then, in 1968, redemption of pre-1963 Federal Reserve notes for gold or silver officially ended. The Coinage Act of 1965 removed all silver from quarters and dimes, which were 90% silver prior to the act. However, there was a provision in the act allowing some coins to contain a 40% silver consistency, such as the Kennedy Half Dollar. Later, even this provision was removed, and all coins minted for general circulation are now mostly clad. The content of the nickel has not changed since 1946.[citation needed]

All circulating notes, issued from 1861 to present, will be honored by the government at face value as legal tender. This means only that the government will give the holder of the notes new federal reserve notes in exchange for the note (or will accept the old notes as payments for debts owed to the federal government). The government is not obligated to redeem the notes for gold or silver, even if the note itself states that it is so redeemable. Some bills may have a premium to collectors.[citation needed]

The only exception to this rule is the $10,000 gold certificate of Series 1900, a number of which were inadvertently released to the public because of a fire in 1935. A box of them was literally thrown out of a window. This set is not considered to be "in circulation" and, in fact, is stolen property. However, the government canceled these banknotes and removed them from official records. Their value, relevant only to collectors, is approximately one thousand US dollars.[citation needed]

According to the Federal Reserve Bank of New York, there was $829 billion in total US currency in worldwide circulation as of December 2007.[10]

In September 2004, it was estimated that if all the gold held by the U.S. government (287.13 million ounces = 8.14 million kilograms = 8,140 metric tonnes) were again required to back the circulating U.S. currency ($733,170,953,704), gold would need to be valued at $2,800/ounce ($90/gram).[citation needed]

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

If the dollars appreciated, we wouldn't need banks.

[-] 0 points by asauti (-113) from Port Orchard, WA 2 years ago

One Definition of: Conspire

"to act or work together toward the same result or goal."

This one being the most simple definition, and also the one that does not imply the nature of the goal. Most definitions do include the notion that the goal is "criminal" in nature. But since the word "criminal" can be subjective and not "all emcompassing" to the meaning, it is then acceptable to use the word "conspire" or "conspiracy" when describing any situation involving at least two people who act in concert toward a common objective.

[-] 0 points by asauti (-113) from Port Orchard, WA 2 years ago

"should we switch to the gold standard?"

Who is "we"?