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(CNBC)   I've got gold. In different area codes   (cnbc.com ) divider line 13
    More: Stupid, Rick Santelli, Audit the Fed, U.S. Federal Reserve, Larry Kudlow, Joe Redner, big and small, retreats, currencies  
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1748 clicks; posted to Business » on 24 Aug 2012 at 12:26 PM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-08-24 12:46:28 PM  
" "There's a very good reason they unhooked it in 1971, because their deficit didn't enable them to maintain it with the supply of gold"

Uhh that's the whole point. If the government can no longer create money at will, they'll have to figure out how to actually balance the budget and can't buy votes with spending projects.
 
2012-08-24 12:59:09 PM  
Have the dollar actually be worth something?

Crazy talk.
 
2012-08-24 01:57:11 PM  

MugzyBrown: Uhh that's the whole point. If the government can no longer create money at will, they'll have to figure out how to actually balance the budget and can't buy votes with spending projects.


Except that the gold standard really doesn't fix that. The government can still borrow as long as lenders have faith that the government can repay the debt.

And deficit spending isn't always a bad thing. We need it during times of war to pay wages, supplies and machinery. And upgrading and expanding infrastructure during a recession is great because materials and wages are often depressed, meaning that the projects are cheaper.

But yeah, our country has a spending problem compounded by a revenue problem. Nothing is going to fix that other than lenders telling the US government to piss off. Because neither party wants to reduce spending, and one party is actively attempting to undermine revenue.
 
2012-08-24 03:11:36 PM  

MugzyBrown: " "There's a very good reason they unhooked it in 1971, because their deficit didn't enable them to maintain it with the supply of gold"

Uhh that's the whole point. If the government can no longer create money at will, they'll have to figure out how to actually balance the budget and can't buy votes with spending projects.


A country that doesn't spend both the present's taxes and future taxes is falling behind.

The US bought highways in 1971 prices, and paid it back with 2012 dollars. Any country not doing that is stupid. If you think inflation will continue, then you want to be borrowing.

Runaway deficits are not good, but a balanced budget is not good either.
 
2012-08-24 03:37:27 PM  
The right answer is not to link back to gold, but to allow the government to print paper money in the same manner in which it currently coins money - interest free. Lincoln did this with greenbacks. As it is now - all paper money is debt.

That said, I can't believe the head of the Treasury at RBS would allow himself to be quoted that there is not enough gold in the world to back U.S. debt. The whole point is that the price of gold reflects how much debt (money) there is. The amount of gold remains roughly the same while the value of it fluctuates.
 
2012-08-24 03:47:24 PM  
isn't this ron paul's arguement?
 
2012-08-24 03:58:15 PM  
FTA: "There's a very good reason they unhooked it in 1971, because their deficit didn't enable them to maintain it with the supply of gold. In fact, is there enough gold in the world to back the U.S. debt?"

Ummm... that's a reason why we never should have gone off the gold standard, ya moran. All that debt that we now can't pay never would have existed in the first place. But it was inevitable, once the government was able to con people into thinking that GDP (which can be artificially manipulated) was a better indicator of economic health than PPR (which can't).
 
2012-08-24 04:01:27 PM  

amoral: MugzyBrown: " "There's a very good reason they unhooked it in 1971, because their deficit didn't enable them to maintain it with the supply of gold"

Uhh that's the whole point. If the government can no longer create money at will, they'll have to figure out how to actually balance the budget and can't buy votes with spending projects.

A country that doesn't spend both the present's taxes and future taxes is falling behind.

The US bought highways in 1971 prices, and paid it back with 2012 dollars.

[snip]

Umm... I gotta stop you right there, Sparky. The truth is that we bought highways at 1971 prices AND WILL BE PAYING INTEREST ON THAT DEBT FOR EVER. The last time that so much as a penny of the debt was paid down was 1959 (or was it 1960?)... it was when Ike was in office.
 
2012-08-24 04:04:16 PM  

amoral: MugzyBrown: " "There's a very good reason they unhooked it in 1971, because their deficit didn't enable them to maintain it with the supply of gold"

Uhh that's the whole point. If the government can no longer create money at will, they'll have to figure out how to actually balance the budget and can't buy votes with spending projects.

A country that doesn't spend both the present's taxes and future taxes is falling behind.

The US bought highways in 1971 prices, and paid it back with 2012 dollars. Any country not doing that is stupid. If you think inflation will continue, then you want to be borrowing.

Runaway deficits are not good, but a balanced budget is not good either.


Also, you seem to think that there's always going to be inflation. You'd be wrong. If we returned to a gold standard, you'd be doubly wrong. Buying at 1971 prices and paying back in 2012 isn't a great deal when you have deflation.
 
2012-08-24 08:52:28 PM  
Thanks for the awesome earworm, subby. I must dig out that CD and transfer it onto my phone.

/now I crave chicken and beer
 
2012-08-24 10:55:15 PM  
The amount of gold is trivial. If it backed an economy as large as the US, it would become extremely valuable. Thus coins and notes wouldn't need to made of gold, just contain enough (say gold threads woven into notes) to back the value of the note. We are talking micrograms, not ounces.
 
2012-08-24 10:57:28 PM  
In any case, the current "monopoly money" system is an inevitable failure. We simply cannot grow the economy exponentially forever.
 
2012-08-25 12:32:52 AM  

MugzyBrown: " "There's a very good reason they unhooked it in 1971, because their deficit didn't enable them to maintain it with the supply of gold"

Uhh that's the whole point. If the government can no longer create money at will, they'll have to figure out how to actually balance the budget and can't buy votes with spending projects.


Nixon took us off of the gold standard to pay for the Vietnam War.

After WWII, the US had 20,000 tons of gold, by far more than anyone else in the world.

Now, the US only has 6000 tons left. And that's the optimistic, government number. If they actually opened up the vaults and did a true audit they probably wouldn't even find 2000 left.
 
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