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The purchasing power of Americans will diminish, and so will the cost of the national debt. Basically, we're trading quality of life for easier repayment -- or more accurately, a bipartisan weak dollar policy has made the trade-off on our behalf.
The purchasing power of Americans will diminish, and so will the cost of the national debt. Basically, we're trading quality of life for easier repayment -- or more accurately, a bipartisan weak dollar policy has made the trade-off on our behalf.
Plus, the gold standard days are pretty much over. I don't even think the US could switch back to it if it wanted to.
Inflation tax is going to hit the middle and lower class like a sledge. It's already started.
there's not enough gold on earth to have a gold standard. too much money exists to be tied to any standard, really.
Exactly.
Hmm....couldn't any fractional amount be used as backing in principle?
Well the dollar is pegged to oil and that is diminishing resource by the minute.
end the mother ing fed
You fix the price of gold, and you don't convert overnight. You temporarily handle 2 currencies and gradually switch to the new gold backed notes.
Sounds tough but the current path we are on is taking us to the financial cemetery
Fractional backing is still fiat.
It is?
You could do that, but arguably, there's simply not enough supply.
The "financial cemetery" being what exactly?
This is something that has needed to be done a long time ago. Some of you may remember I am an advocate of devaluing the dollar. Imported goods will cost more and our exports will become less expensive for other nations. It will bring back some manufacturing as the balance changes.
Is 30% enough... I say not enough and 20 years is too long.
It will take a of a lot more than 30% devaluation to be able to work and live with just $120/month or so... better enjoy our standard of living now, until things "balance out".
what do you mean? you know exactly how much total gold there is, you derive a note based on this amount.
So it could turn out $100 or $1,000 fiat dollars = $1 gold dollar. I fail to see the issue.
Argentina 2000-2002The "financial cemetery" being what exactly?
You can't do that without effectively devaluing the fiat dollar. Why not just devalue the fiat dollar and be done with it?
Can't happen with the dollar.
The Argentinian Peso back then was artificially pegged to the US dollar, and that's what caused the bust. The US Dollar is a free floating, sovereign currency (as wisely pointed out by 2centsworth in the other thread)
not necessarily. if you introduce the new notes gradually over time(5 year notes).
was referring to the results, not the source of the problem.Can't happen with the dollar.
The Argentinian Peso back then was artificially pegged to the US dollar, and that's what caused the bust. The US Dollar is a free floating, sovereign currency (as wisely pointed out by 2centsworth in the other thread)
Oil is traded in dollars. Therefore the supply/demand of oil will affect the dollar value more than pretty much anything else.
The problem with re-tying the dollar to gold is that the instant that happens, anyone with a modi of intelligence will call the bluff and exchange billions of their dollars for gold. USA will be unable to provide the gold to back it to the tied amount.
The USA needs to constantly expand its money supply in order to pay interest on debts, and to sustain a growing population and economy. Too many people would foresee this and exchange their dollars for gold immediately.
This exact scenario already happened in 1970 when Nixon untied the dollar from the gold standard.
http://en.wikipedia.org/wiki/Nixon_Shock
Switzerland, then France both saw that the USA was printing up lots of money. They called the bluff and exchanged massive sums of US dollars for gold. "OH " says the USA. "We can't do this anymore". The USA can print money but can't print gold. With an exponentially expanding economy and population, and exponentially decaying rates of gold discovery, fiat money was the only option.
The problem with all fiat currencies is that invariably they will return to their intrinsic value.
Last edited by greyforest; 02-13-2012 at 03:16 PM.
again, you don't switch overnight. You do it gradually with limited issue of gold dollars.
You can only lose your virginity once. There's no going back now.
Again... you discount something that needs done because it doesn't fix something 100%.
Why are you always so short sighted? There are other steps that need done also. No single change will be -the- solution alone.
More decline in quality of life in America?
European middle class continues to ROTFL @ American middle class
Have you not noticed the riots everywhere in Europe as the governments accept financial reality and cut back on the perks and bennies?
the results have everything to do with the problem.
You can't get to that result with the US Dollars because that problem doesn't exist for the US.
So it's oil that's pegged to the dollar, not the other way around. The supply/demand of oil affects the price of oil.
Limiting "gold dollars" only creates an artificial bubble in the value of gold. There's nothing stopping the average joe to simply buy gold instead.
Yes. When will Americans grow a spine and riot?
Have you not noticed the riots everywhere in Europe as the governments accept financial reality and cut back on the perks and bennies?
Americans = Occupy & then told by ''free'' government to get the f out
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