Just an historical note on "inflation": England established the pound sterling to gold in 1717 and the wholesale price index was about 100. It was still about 100, 200 years later. The dollar to gold ratio was established around 1793 in the US. The wholesale price index was the same in 1931 as it was in 1799. Acute inflation did occur during war times, but chronic inflation did not exist in the US until we abandoned the dollar to gold link in 1973. Sadly, during a Republican Presidency.
Re: "New America gets poorer
- Thread starter Ivan8883
- Start date
G Freeman very correct when he mentioned what Nixon did in 1973 by taking the dollar completely away from the gold which ceases to exist at Ft Knox. Your dollar has been on a free fall ever since and is bassically worthless today and it takes a bucket full of US dollars to buy what it bought in the early seventies. In many ways Nixon put the final nails inthe Us economic coffin when he moved the gold out. Our national debt has dramatically increased since the seventies when Nixon ended the link to gold. These politicians are sinful,evil people who sold out our industries and dollar stability. We are bankrupt. Period!
Sorry, I know from first hand experience that conspiracy theorist nonsense about "no gold at Fort Knox" in 73 is exactly that. I had a temporary job there in the summer of 77 and helped move 47,000 bars at about 27# each. IIRC, we were told this represented ~10% of what was there, which felt right from what we could see of the other vaults through the peepholes.
As you might expect, the interior shots of the Bullion Depository in "Goldfinger" are quite fanciful
JimR
As you might expect, the interior shots of the Bullion Depository in "Goldfinger" are quite fanciful
JimR
BTW, lest my previous post be misunderstood, we moved it down the hall from one vault to another so it be audited in route. There were GAO and Treasury auditors looking over each others' shoulders.
$4.67 / hour and no taxes or FICA, a princely sum for a college student in '77.
JimR
$4.67 / hour and no taxes or FICA, a princely sum for a college student in '77.
JimR
Rosco P. Coltrain
Moderator
I find it funny that some people forget three very important facts.
95% of all consumer goods produced by the world, are consumed in the United States and Canada.
US labor is the cheapest of anywhere in the world, dolar spent per productivity wise.
The United States is one of only 5 grain exporting nations.
Capitalism is a system that benefits the smart and screws over the stupid, the solution is not to be stupid.
95% of all consumer goods produced by the world, are consumed in the United States and Canada.
US labor is the cheapest of anywhere in the world, dolar spent per productivity wise.
The United States is one of only 5 grain exporting nations.
Capitalism is a system that benefits the smart and screws over the stupid, the solution is not to be stupid.
The relative success of capitalism has occurred despite the interventions into the free market by "stupid" government. The more we can distance government from the market by making it smaller, the more all who apply themselves will benefit. Personally, I'm sure a boat load of bullion is stored in Ft. Knox. The problem is our currency is not linked to it. The beauty of the gold standard is that complex computer models and a board of appointed wise men cannot efficiently or accurately decipher what the market is demanding concerning the money supply. With a gold linked currency (one that is as good as gold), the Fed's decision making process is not mystical any longer. When those in the market bring currency in exchange for gold, the sign is to shut off the money supply. Conversely, when they sell gold for currency, the sign is to increase the supply. What this also accomplishes is preventing the vile and stupid government act of intentionally devaluing the currency to gain power.
Rosco P. Coltrain
Moderator
The reason the US went off the gold standard is because the US being on the gold standard realy benefitted two nations, the Republic of South Africa, which was then under Aparteid, and the Soviet Union. This is because those countries have the worlds largest gold mines. The US government did not see why we should benefit RSA and USSR.
If you want a currency standard, I would suggest either platinum or paladium instead of gold.
If you want a currency standard, I would suggest either platinum or paladium instead of gold.
A proper gold standard would still allow for the gross money supply to increase at a stable rate. Gold is a commodity and on average its production has increased globally by around 2 to 3%. Russia or SA, regardless of how much gold they produce, can never control control our monetary system. Why should it bother us if they arrive at our window with gold? We simply exchange sound dollars for it, with the knowledge that these dollars will find their way back to our window again from the private market. Even if gold production stopped, the quality of the dollar could probably be maintained in a stable manner under slight deflation. I would like to see the integrity of our currency moved further beyond the reach of politicians and eliminate our reliance on wise men to make correct "guesses" for us. I am not sure, but have heard this quote attributed to Reagan, "..No great nation has left the gold standard and remained a great nation."
two problems with fixing currency to precious metals;
1- the total value of the available metal may be less than the total GDP of your country,
2- unless you are the primary producer of said metal, you are vulnerable to currency manipulations by the big producers.
one of the reasons gold dropped from the $400/oz level to the $300/oz level is that people have been expecting the Russians to dump bigtime, as soon as U.S. handouts start drying up.
the problem with these simplistic arguments is that they neglect the driving force in modern economies; that of market psychology. the Great Depression was caused primarily because savers and consumers lost faith in the banking system and the overall economy. going back to a gold standard would make us extremely vulnerable to manipulations by foreign powers. what would happen to our economy if Russia threatened to dump 50 million oz of gold into the gold market? people would assume their "gold dollars" were about to devalue, and merchants would start raising prices, causing rapid inflation. it would be 1920s Germany all over again.
the inflation of the 1970s was due mostly to increases in oil prices. in the industrialized west, the connection between oil prices and inflation dominates all other factors.
the national debt is there simply because our gov't spent more than it brought in. we "paid" for Vietnam with deficit spending, and Johnson's "Great Society" bullcrap kicked in during the 1970s, thus creating a large underclass of "entitlement" recipients. the US has had a national debt for something like all but 5 years since the ratification of the Constitution. the real question is, what is the ratio of the total debt to the GDP? it's not bad at all right now, and certainly better than a lot of western industrial nations.
1- the total value of the available metal may be less than the total GDP of your country,
2- unless you are the primary producer of said metal, you are vulnerable to currency manipulations by the big producers.
one of the reasons gold dropped from the $400/oz level to the $300/oz level is that people have been expecting the Russians to dump bigtime, as soon as U.S. handouts start drying up.
the problem with these simplistic arguments is that they neglect the driving force in modern economies; that of market psychology. the Great Depression was caused primarily because savers and consumers lost faith in the banking system and the overall economy. going back to a gold standard would make us extremely vulnerable to manipulations by foreign powers. what would happen to our economy if Russia threatened to dump 50 million oz of gold into the gold market? people would assume their "gold dollars" were about to devalue, and merchants would start raising prices, causing rapid inflation. it would be 1920s Germany all over again.
the inflation of the 1970s was due mostly to increases in oil prices. in the industrialized west, the connection between oil prices and inflation dominates all other factors.
the national debt is there simply because our gov't spent more than it brought in. we "paid" for Vietnam with deficit spending, and Johnson's "Great Society" bullcrap kicked in during the 1970s, thus creating a large underclass of "entitlement" recipients. the US has had a national debt for something like all but 5 years since the ratification of the Constitution. the real question is, what is the ratio of the total debt to the GDP? it's not bad at all right now, and certainly better than a lot of western industrial nations.
Rosco P. Coltrain
Moderator
Ivanhoe, too true.
The Gold standard is based on a big assumption, that gold will always be valuable. Here we run into two big problems, the demand for gold is dropping and the suply is increasing.
The Gold standard is based on a big assumption, that gold will always be valuable. Here we run into two big problems, the demand for gold is dropping and the suply is increasing.
My opinion,but we shall see soon what is worth what; the Us currency backed by ??? or the old stand by when currencies collapse; gold. The only survivors of the recent Indonesian economic collapse are the gold and silver holders. Us currency wont "collapse"? Prediction: Poland, Suadi Arabia, South American nations and Mexico owe billions to international banks. The Poles owe 30 billion to banksters and arent even paying on the interest. The first country to default on its loans,and it could be Poland,will cause a chain reaction that will end up in Mexico which owes Us banks 100 billion! When you see the first nation to default on its loans, i believe we in America will have about 2 weeks before the American banks declare a "holiday and close up. The big boys are getting ready with their supplies of gold and silver. The markers must come due on this debt ridden, international financial system. Get some real money boys!
Rosco P.:
Are you sure that *95%* of the world's consumer goods production is consumed in the United States and Canada?
Consider that Japan and Western Europe combined have a population at least equal to, and probably 10-50% greater than, that of the USA and Canada. Even if we assume that no one in the rest of the world consumes any consumer goods at all, then your 95% figure implies that the average US/Canadian citizen is buying at least NINETEEN times as many clock radios, sneakers, video games, et cetera as the average Japanese/European citizen. We do have a higher standard of living than our neighbors across the oceans, but I don't think that we're gobbling up the world's goodies nineteen times faster than them!
Are you sure that *95%* of the world's consumer goods production is consumed in the United States and Canada?
Consider that Japan and Western Europe combined have a population at least equal to, and probably 10-50% greater than, that of the USA and Canada. Even if we assume that no one in the rest of the world consumes any consumer goods at all, then your 95% figure implies that the average US/Canadian citizen is buying at least NINETEEN times as many clock radios, sneakers, video games, et cetera as the average Japanese/European citizen. We do have a higher standard of living than our neighbors across the oceans, but I don't think that we're gobbling up the world's goodies nineteen times faster than them!
[the Great Depression was caused primarily because savers and consumers lost faith in the banking system and the overall economy] So then we are to believe that this massive collective hive we call the market suddenly stopped functioning because of a unanimous psychological glitch? That is a truly frightening notion often used by Keynesian apologists. In response I can only recommend Jude Wanniskis'(one of the supply siders I credit with helping produce our current good times and staunch gold supporter) brilliant assessment that the cause was actually the blunders of a few individuals in government-namely the Smoot-Hawley Tariff Act of 1930. See "The Way the World Works", Chapter 7. I won't try to win conversions to a "hard money" policy now by leaving that to smarter folks than me like Aurthur Laffer,Lewis E. Lehrman,Wanniski, and Alexander Hamilton(Federalist Papers). 
Gale McMillan
Member In Memoriam
It was not a loss of confidence. They closed the bank doors and one day you had money and the next you couldn't buy squat! If you had a job you were lucky to make 75 dollars per month to raise a family of 5. My brother worked 12 hours a day driving a tractor and made 2.50 per day and was glad to get it. You have never seen it when 40 to 50% of the men were out of work. What do you think got FDR elected?
the reason why the banks closed their doors was because they were swamped with withdrawals (the proverbial "bank runs" were not just about cash). banks exist to take in deposit accounts (i.e. savings accounts) and loan the money out to industrial firms and mortgage holders at a higher rate than they pay the savings acct holders. without the money from the savers, they could not loan to the manufacturers for new PP&E, which caused a real economic downturn.
to be blunt, it is idiotic to claim that folks in Indonesia that "survived" did so because of precious metal holdings. if you look into the personal holdings of any of the Asian crime/political families, you will find massive holdings of U.S. T-bills and bonds, which are payable in those "worthless dollars." likewise for the big oil families in the middle east.
if gold were so wonderful, why are Russian mobsters laundering their money into NY banks, whose accounts are denominated in USD? you would think that the Russians would be laundering into gold, given that they have ready access to it.
the USD is the one currency on this planet that is usable, and typically highly desirable, in every country. in a lot of the 3rd world, you get a discount if you pay in USD rather than the local currency.
if the U.S. went back to gold-backed currency, it would require a complete overhaul of the Federal Reserve system, which has been a major factor in our economy becoming the dominant force in the history of human existence. I sure don't want to go back to a 1920 standard of living!
to be blunt, it is idiotic to claim that folks in Indonesia that "survived" did so because of precious metal holdings. if you look into the personal holdings of any of the Asian crime/political families, you will find massive holdings of U.S. T-bills and bonds, which are payable in those "worthless dollars." likewise for the big oil families in the middle east.
if gold were so wonderful, why are Russian mobsters laundering their money into NY banks, whose accounts are denominated in USD? you would think that the Russians would be laundering into gold, given that they have ready access to it.
the USD is the one currency on this planet that is usable, and typically highly desirable, in every country. in a lot of the 3rd world, you get a discount if you pay in USD rather than the local currency.
if the U.S. went back to gold-backed currency, it would require a complete overhaul of the Federal Reserve system, which has been a major factor in our economy becoming the dominant force in the history of human existence. I sure don't want to go back to a 1920 standard of living!
How about a silicon standard for the global economy? That seems to be what we have today.
What's really scary about that is Matthew
7:24-27:
"Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto
a wise man, which built his house upon a rock:
And the rain descended, and the floods came, and the winds blew, and beat upon that
house; and it fell not: for it was founded upon a rock.
And every one that heareth these sayings of mine, and doeth them not, shall be likened
unto a foolish man, which built his house upon the sand:
And the rain descended, and the floods came, and the winds blew, and beat upon that
house; and it fell: and great was the fall of it."
Our global economy is based on sand.
What's really scary about that is Matthew
7:24-27:
"Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto
a wise man, which built his house upon a rock:
And the rain descended, and the floods came, and the winds blew, and beat upon that
house; and it fell not: for it was founded upon a rock.
And every one that heareth these sayings of mine, and doeth them not, shall be likened
unto a foolish man, which built his house upon the sand:
And the rain descended, and the floods came, and the winds blew, and beat upon that
house; and it fell: and great was the fall of it."
Our global economy is based on sand.
Yes, our economy is based on sand or less than sand! And the Federal Reserve System is a slave system for all of us who have loans, mortgages,homes, money in the bank, credit cards, and property. THe Federal Reserve owns all of the above through its control of the banking system.Even the politicians who allowed the private Banksters to control our economy starting in 1913 knew what evil they had started.Yes, it is too late to change things by man. Andrew Jackson warned the people about a central banking system in the last century. He called them "a den of vipers" .