Im all for a gold standard or some sort of hard commodity backed standard. But I always thought the main problem with a gold standard is that the richest and thus most powerful country in the world would be the one who sits on the biggest gold reserves, a mine could be included in this.

So following the pseudo golden rule of he who has the gold makes the rules.

Now imagine of instead of oil suadi arabia had fields of gold, then that means that saudi arabia would be the richest and most powerful country in the world.

Would anyone really want to live in a world where saudis are the shot callers?


Is this true even? If a country like saudi arabia had vast fields of gold would they then in a gold standard world be the richest and most powerful country?

I'm not sure who has the largest chunks of gold. It's certainly not in Fort Knox. All I can tell you is that Kennedy wanted to put us on a silver backed currency in the 1960's, so there must be a reason he choose that over gold. I believe the banking elite hoard most of the gold, but this may not be the case at all. Gold is a good conductor, it is dense, and it is shiny. Besides this, I don't see much value in it. People, our energy and skills, are the true wealth of humanity. When we finally realize this and fix our monetary system, things will be much better off than now.

Originally posted by Desolate Cancer

Now imagine of instead of oil suadi arabia had fields of gold, then that means that saudi arabia would be the richest and most powerful country in the world.

Spain was in a situation much like that after discovering America. All the gold they took across the Atlantic helped them become one of the great powers of Europe. But the catch was Inflation, which got worse in Spain than anywhere else, and in the long term that levelled things out.

Yes, anyone with access to new gold gets the balance tilted in their favour a little. But one important difference is that gold does not flow out of the ground as easily as oil!

Having all of the gold doesn't mean you get to be in charge.

It just means your the main target for those wanting to kill you and take your gold away.

That is why most people do not know where the gold is at, because those with it are prudent enough to keep it somewhat secretive and low key.

When no one knows it exists or where it is, they have a hard time trying to kill you for it!

The gold standard is a false ideal. Gold can be manipulated through hoarding and controlling the mining and it is possible that one day science will be able to create gold from more common elements.

I believe that

unityemissions

is on the right track whether he knows it or not with

People, our energy and skills, are the true wealth of humanity.

I believe we need a currency that is based on work. Work is the most fundamental exchange that exists. Everything of value requires work. Even finding and digging gold out of the ground.

But you cannot eat gold. Also, if the quantity of gold goes up, the value of your dollar goes down.

I still haven't figured out all the ins and outs of it but I can give a rundown as the best I can.

As of now, our fiat money can be manipulated by many different things. The money supply, the discount rate that banks are offered their rates at, other currencies comparitive to it amongst a couple more.

With gold, you cannot manipulate its value as easily. Yes it can be manipulated, by hoarding, new deposits discovered, the old Clinton trick of plating tungsten bars. Ever wonder how he manipulated that nice surplus?

But what cannot be done, is the fractional banking if you are on a commodity based currency.

Meaning you cannot create money from nothing. See our system of currency really is not currency. It is debt. It is a promise to pay system.

You go to the bank and ask for a loan. They do not take that money out of their deposits completely. They are allowed a certain ratio, say for every 10 you want, they create out of thin air 9, poof, new money based on your promise to pay. This is what causes the debt society and why our economies are crashing. Besides of course the corrupt bankers, corrupt wall street, and corrupt politicians.

With a gold standard, you have to have the money or you cannot spend it. Unless you can borrow it from another person of bank that has the gold.

Now, I am sure if you left the Federal Reserve in charge they would still try the fractional reserve component. Which of course would make the gold go down in price. Which defeats the very purpose of the gold standard. But, with the gold standard, increase in values of the total assets needs to be taken up somewhere. This is where your value of the gold will increase in value. Meaning prices will actually decrease in regards to the quantity of gold. Things do not go up, they will go down over time. At least I think so.

We need an Austrian trained person. I had a crappy keynesian in college. Sorry I could not help more.

Now, I may have made an error or two. It has been awhile since I have had Macroeconomics. I am very shaky on my explanation here. Hoped it helped a little bit.


You know what, I may be totally wrong on this whole thing. Do not listen to me. But hell if I am going to throw it away.

I appreciate the responses , it makes sense that a country like USA or China that produces so much would still have more value than saudi arabia, just like now. But the problem with gold is that it is so limited and concentrated.

Ron Paul acknowledged this problem as well, which is why he thinks that backing currency based on a basket of commodities makes more sense, which is more logical.