Who Really Killed the Gold Standard?

a reply to: ScepticScot

Thank goodness I'm not on their list.

a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

originally posted by: ScepticScot
a reply to: SkeptiSchism

In normal usage book value for a non depreciating asset is its acquisition cost. It's used for measuring gains/ losses.

It's slightly different when talking about US gold reserves as the book is set as a fixed amount regardless of acquisition date.

This page from the federal reserve clearly states they do not own the gold of the US and instead own gold certificates. So I sort of understand your comment related to acquisition cost, however don't they also hold gold for other nations as well?

Does this accounting procedure have something to do with the amounts of gold the fed holds for other governments?

Does the Federal Reserve own or hold gold?

The Federal Reserve does not own gold.

The Gold Reserve Act of 1934 required the Federal Reserve System to transfer ownership of all of its gold to the Department of the Treasury. In exchange, the Secretary of the Treasury issued gold certificates to the Federal Reserve for the amount of gold transferred at the then-applicable statutory price for gold held by the Treasury.

Gold certificates are denominated in U.S. dollars. Their value is based on the statutory price for gold at the time the certificates are issued. Gold certificates do not give the Federal Reserve any right to redeem the certificates for gold.

The statutory price of gold is set by law. It does not fluctuate with the market price of gold and has been constant at $42 2/9, or $42.2222, per fine troy ounce since 1973. The book value of the gold held by the Treasury is determined using the statutory price.

Although the Federal Reserve does not own any gold, the Federal Reserve Bank of New York acts as the custodian of gold owned by account holders such as the U.S. government, foreign governments, other central banks, and official international organizations. No individuals or private sector entities are permitted to store gold in the vault of the Federal Reserve Bank of New York or at any Federal Reserve Bank.

www.federalreserve.gov...

So if I understand you correctly they book gold at $42.22 because they own gold certficates which are not a legal claim to the US treasury gold, so why are they even keeping this account artifact of a dead system on their books?

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Why would treasury want to sell the gold that is stupid like Canada stupid or Gordon Brown stupid.

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Okay but if they don't own the gold, it is the property of the people of the United States, why do they even keep this accounting artifact?

Why not just eliminate it from their books? What is the point?

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Why would treasury want to sell the gold that is stupid like Canada stupid or Gordon Brown stupid.

There are lots of reasons why they might want to sell gold reserves. They may view holding gold as a poor return, they may wish to stabilise a declining exchange rate.

Not much point in having a good reserve if you are willing to use it.

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Okay but if they don't own the gold, it is the property of the people of the United States, why do they even keep this accounting artifact?

Why not just eliminate it from their books? What is the point?

The gold is owned by the US government on behalf of the people.

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Okay but if they don't own the gold, it is the property of the people of the United States, why do they even keep this accounting artifact?

Why not just eliminate it from their books? What is the point?

The gold is owned by the US government on behalf of the people.

Yes but that doesn't answer my question if the gold is owned by the US government on behalf of the people, why keep the accounting artifact of the gold certificates?

I'm glad I found someone here who works for the fed and can answer my questions, I've never been so lucky. Thank you.

originally posted by: SkeptiSchism

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Okay but if they don't own the gold, it is the property of the people of the United States, why do they even keep this accounting artifact?

Why not just eliminate it from their books? What is the point?

The gold is owned by the US government on behalf of the people.

Yes but that doesn't answer my question if the gold is owned by the US government on behalf of the people, why keep the accounting artifact of the gold certificates?

I'm glad I found someone here who works for the fed and can answer my questions, I've never been so lucky. Thank you.

Because the whole structure of the Federal Reserve, the Treasury and money creation in the US is extremely antiquated and overly convoluted.

I don't really work for the Fed, they couldn't afford me...

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Why would treasury want to sell the gold that is stupid like Canada stupid or Gordon Brown stupid.

There are lots of reasons why they might want to sell gold reserves. They may view holding gold as a poor return, they may wish to stabilise a declining exchange rate.

Not much point in having a good reserve if you are willing to use it.

Why sell your gold when it's underpriced by the future's market?

a reply to: ScepticScot

That's interesting if your time is so valuable why do you spend so much of it here?

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Okay but if they don't own the gold, it is the property of the people of the United States, why do they even keep this accounting artifact?

Why not just eliminate it from their books? What is the point?

The gold is owned by the US government on behalf of the people.

Yes but that doesn't answer my question if the gold is owned by the US government on behalf of the people, why keep the accounting artifact of the gold certificates?

I'm glad I found someone here who works for the fed and can answer my questions, I've never been so lucky. Thank you.

Because the whole structure of the Federal Reserve, the Treasury and money creation in the US is extremely antiquated and overly convoluted.

I don't really work for the Fed, they couldn't afford me...

So this gets to the heart of the matter here, the idea of 'money creation'. Why don't you share your valuable time and tell me why you think it's convoluted and how it could be improved and why it takes 'valuable thinkers' like yourself to create money for everyone else instead of the economy producing the money that it uses?

originally posted by: SkeptiSchism

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Why would treasury want to sell the gold that is stupid like Canada stupid or Gordon Brown stupid.

There are lots of reasons why they might want to sell gold reserves. They may view holding gold as a poor return, they may wish to stabilise a declining exchange rate.

Not much point in having a good reserve if you are willing to use it.

Why sell your gold when it's underpriced by the future's market?

Because gold isn't underpriced and we are not talking about the futures market.

A country owning gold does not in anyway improve it's economy or increase the welfare of it's people if it's not willing to use the gold reserves when required.

originally posted by: SkeptiSchism

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Okay but if they don't own the gold, it is the property of the people of the United States, why do they even keep this accounting artifact?

Why not just eliminate it from their books? What is the point?

The gold is owned by the US government on behalf of the people.

Yes but that doesn't answer my question if the gold is owned by the US government on behalf of the people, why keep the accounting artifact of the gold certificates?

I'm glad I found someone here who works for the fed and can answer my questions, I've never been so lucky. Thank you.

Because the whole structure of the Federal Reserve, the Treasury and money creation in the US is extremely antiquated and overly convoluted.

I don't really work for the Fed, they couldn't afford me...

So this gets to the heart of the matter here, the idea of 'money creation'. Why don't you share your valuable time and tell me why you think it's convoluted and how it could be improved and why it takes 'valuable thinkers' like yourself to create money for everyone else instead of the economy producing the money that it uses?

I post here because it can be fun and informative.

By your tone I can see you are still rather upset that your errors were pointed out. If you are expecting everyone to unconditionally agree with you then perhaps ATS isn't the best forum for you to use.

a reply to: SkeptiSchism

Book value is what was spent to attain the asset market value is what you can sell it for. So In the case of US gold $ 42.2222 is what the US paid per troy ounce. A troy ounce is a bit heavier than a regular ounce. One regular ounce is 28.35 grams, while a troy ounce is 31.1 grams.

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Why would treasury want to sell the gold that is stupid like Canada stupid or Gordon Brown stupid.

There are lots of reasons why they might want to sell gold reserves. They may view holding gold as a poor return, they may wish to stabilise a declining exchange rate.

Not much point in having a good reserve if you are willing to use it.

Why sell your gold when it's underpriced by the future's market?

Because gold isn't underpriced and we are not talking about the futures market.

A country owning gold does not in anyway improve it's economy or increase the welfare of it's people if it's not willing to use the gold reserves when required.

Gold is a strategic asset it's used to build things like circuit boards and it's used as an indicator of wealth. One reason is to protect the credibility of their currencies. Although the world long ago abandoned the gold standard, the metal still maintains virtually universal confidence. So if confidence in a nation’s political or economic stability is shaken, gold stands as a backstop buttressing trust in its creditworthiness.

But your biggest problem with spending the gold it would destroy the market. If the US could sell off its gold reserves it could pay off the national debt easily. Problem is the sale would cause the price to nose dive.

First, any sign the U.S. was considering selling its gold would wreak havoc in the marketplace. Prices would collapse and gold investors and speculators would be devastated. The reserves of central banks around the globe would decline sharply and the solvency of so-called bullion banks would be threatened.

originally posted by: dragonridr

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot

originally posted by: SkeptiSchism

originally posted by: ScepticScot
a reply to: SkeptiSchism

Can't watch the video at moment so sorry if commenting on wrong thing but the gold certificates held by the fed are a legacy from how money was created during the gold standard period.

Book values for assets are kept static as an accountancy convention. (Except for depreciation.)

If the US however sells gold it would do so at market price fur the quantity it wished to sell.

Why would treasury want to sell the gold that is stupid like Canada stupid or Gordon Brown stupid.

There are lots of reasons why they might want to sell gold reserves. They may view holding gold as a poor return, they may wish to stabilise a declining exchange rate.

Not much point in having a good reserve if you are willing to use it.

Why sell your gold when it's underpriced by the future's market?

Because gold isn't underpriced and we are not talking about the futures market.

A country owning gold does not in anyway improve it's economy or increase the welfare of it's people if it's not willing to use the gold reserves when required.

Gold is a strategic asset it's used to build things like circuit boards and it's used as an indicator of wealth. One reason is to protect the credibility of their currencies. Although the world long ago abandoned the gold standard, the metal still maintains virtually universal confidence. So if confidence in a nation’s political or economic stability is shaken, gold stands as a backstop buttressing trust in its creditworthiness.

But your biggest problem with spending the gold it would destroy the market. If the US could sell off its gold reserves it could pay off the national debt easily. Problem is the sale would cause the price to nose dive.

First, any sign the U.S. was considering selling its gold would wreak havoc in the marketplace. Prices would collapse and gold investors and speculators would be devastated. The reserves of central banks around the globe would decline sharply and the solvency of so-called bullion banks would be threatened.

Even if the US could sell off its gold reserves at full market price, and as you correctly point out it couldn't, then it would not come close to paying off the national debt.

My point wasn't that gold reserves should be sold off, but that they can be used for greater economic good.

Gold sitting Scrooge McDuck style in huge quantities adds nothing of value to the US economy.

The reserve is there to be used as required.

a reply to: dragonridr

Actually the book value is an accounting relic.

The Federal Reserve does not own gold. The Gold Reserve Act of 1934 required the Federal Reserve System to transfer ownership of all of its gold to the Department of the Treasury. In exchange, the Secretary of the Treasury issued gold certificates to the Federal Reserve for the amount of gold transferred at the then-applicable statutory price for gold held by the Treasury.

Gold certificates are denominated in U.S. dollars. Their value is based on the statutory price for gold at the time the certificates are issued. Gold certificates do not give the Federal Reserve any right to redeem the certificates for gold.

The statutory price of gold is set by law. It does not fluctuate with the market price of gold and has been constant at $42 2/9, or $42.2222, per fine troy ounce since 1973. The book value of the gold held by the Treasury is determined using the statutory price.

www.federalreserve.gov...

a reply to: ScepticScot

What errors, you just have a difference of opinion. I thought this was a forum where people could express their differences in opinion? If you don't like that, maybe this forum isn't for you?

a reply to: ScepticScot

Okay, this is certainly within a fair use policy, I made a thread about whom I believe killed the gold standard and you replied:

originally posted by: ScepticScot
Who killed the gold standard? Reality killed the gold standard.

Gold standards have consistently failed as they are unable to adapt quickly enough to economic pressures.

Which is fine, that is your opinion. So lets stay on track with the original post. Unless you own the forum then by all means you can choose to ban me or whatever. If you do not own the forum then let's stay on target.

Okay?