Economic Question for ATS (smart ones only please... LOL)

Ok, forget the last part - but I'm not an economist or anything near a financial wiz. My wife cooks the books in my house, I just make the money and spend it.

So, if Ron Paul has his way and the United States were to reattach their currency to the gold standard, what would happen to the financial industry in the United States?

As I imagine it - we've essentially all got numbers assigned to us in databases across the nation. There is no actual value to the numbers other than what we assume them to be.

We have created a value for an intangible good that doesn't actually exist.

So if we were to readopt the gold standard, wouldn't a significant portion of the assumed "wealth" simply just disappear?

I mean, there's probably more numbers in the databases than actual printed dollar bills. We pay everything electronically now days - no actual "cash note" needed.

If those numbers had to be tied to an actual physical amount of gold somewhere... wouldn't we have to eliminate a big chunk of the "money" floating out there in cyber land?

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Please educate me. AND FOR THE LOVE OF ALL THATS GOOD - Don't soap box here, I'm looking for an answer to a question, not your personal rant about the topic.

Originally posted by gncnew
Ok, forget the last part - but I'm not an economist or anything near a financial wiz. My wife cooks the books in my house, I just make the money and spend it.

So, if Ron Paul has his way and the United States were to reattach their currency to the gold standard, what would happen to the financial industry in the United States?

As I imagine it - we've essentially all got numbers assigned to us in databases across the nation. There is no actual value to the numbers other than what we assume them to be.

We have created a value for an intangible good that doesn't actually exist.

So if we were to readopt the gold standard, wouldn't a significant portion of the assumed "wealth" simply just disappear?

I mean, there's probably more numbers in the databases than actual printed dollar bills. We pay everything electronically now days - no actual "cash note" needed.

If those numbers had to be tied to an actual physical amount of gold somewhere... wouldn't we have to eliminate a big chunk of the "money" floating out there in cyber land?

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Please educate me. AND FOR THE LOVE OF ALL THATS GOOD - Don't soap box here, I'm looking for an answer to a question, not your personal rant about the topic.

I suspect that if We go back on the GS each dollar will be worth some very small amount of gold - like a few molecules! LOL! But at that point, We would be "fixed" to that amount and fluctuation would be very limited as far as that goes.

Still, We need to eliminate the middle man to be truly effective in controlling Our currency: Be Rid of the Fed!

reply to post by gncnew


I am no economist either but....as I see it, the way the gold standard worked was similar to the way Vegas casinos are required to operate.

For every chip on the casino floor, there is the equivalent dollar amount locked in the vault to cover the chip.

Gold standard similar. For every dollar the mint releases, there is an equivalent amount of gold to cover the dollar. In theory, as I take it, in order to print more money, we would have to get more gold.

Even if we went back onto the gold standard, leverage will always exist.

Newton got to put a final and absolute value on gold once,
as endorsed by the Crown, and all the silver left the country.
It was called the silver famine. He had slightly overvalued silver
in his penultimate calculations so every merchant was inclined to
pay their bills in gold, but only take payment in silver. It was a disaster.

If one were to add diamonds that would just give more avenues of
leverage to be used to take advantage of exchange rates. Now
a banker has to do more than balance books they have to
pay attention to the diamond climate, gold, silver, and
currencies all at the say time. The accountants are
pretty sure we have too many currencies already.

I think the only magic bullet left is to demand
fully open books for the wall street banks,
not the Federal Reserve. Those are
supposed to be public stocks.


David Grouchy

You are correct that a gold standard would not work. Only way it would have a chance to work is if the whole world participated and pegged gold to a fixed price. Otherwise our economic worth would be determined on foriegn exchanges where the price of gold continued to fluctuate.

i believe that if/when we return to the gold standard we would have to print a whole new currency, similar to the greenback, that would be listed as backed by gold. The federal reserve notes you have in your pocket will still be worth something, just nothing like what it used to be worth.

There were plenty of booms and busts during the gold standard. If fact they were often worse than we see with fiat currency. Tulip mania comes to mind as well as the booms and busts that brought about the Federal Reserve System. If there is to be a commodity backed system it cannot be tied to only one resource. Tying the dollar to gold gives the nations that produce or have bought the most gold insurmountable leverage over a nation that does not produce much gold.

Any change to an asset backed currency must include gold but should not be exclusively gold. A basket of commodities both hard (gold, silver, copper, rare earth, etc), soft (oil, wheat, corn, livestock), and also maybe something less tangible like labor units ( some measure of hours of unskilled labor).

A fiat currency can work as long as the business cycle is not interfered with. The PTB gladly increase the supply of fiat during times of expansion(inflation) but violently resist the reverse (deflation) during the NATURAL process of the business cycle.

reply to post by sligtlyskeptical


That's why I'm hoping the economy will collapse.

And the dark hats will be removed

and the white knights will head the new financial system.

Gold and Silver now being in complete control of global speculators makes it impossible to put a fixed value on metal. Thus no way to stabilize the dollar.

I speculate in the metals market and for the savvy investor; it's a license to steal or at times lose your ass.

Ron Paul has some great ideas....this aint one of em.

Ron Paul doesn't want to ``return`` to a gold standard the way you're thinking.

He just wants to repeal all legal tender laws, allowing monetary competition.
H.R. 4248: Free Competition in Currency Act

You are absolutely correct.

If we did go back to a gold standard or any other commodity backed currency all the fake wealth will be destroyed.

How much wealth is lost will be dependant on the value each unit of commodity is assigned to each dollar.

Remember that Gold has never really risen in value, what could be purchased for a twenty dollar gold piece in 1900 still can be purchased with a twenty dollar gold piece today. What actually has take place is the dollar has lost its value and it takes a lot more than twenty dollars to purchase the twenty dollar gold piece today.

The reason that we should return to the gold standard is a long term concept. That what you work and save for today will still have the same value decades latter.

One of these days I will figure out how to use direct quotes for everybodys replies so I can address specific comments and questions

The money that is out there in cyber world as you put it would slowly be absorbed over time. In theory anyway.
Being in a hurry as usual I don't have the time to better explain it now but you can check out the cato institute on line. Then in the search box on thier website type in gold standard. There is a lot of reading to do but it will do a much better job at explaining the pro's and con's of having a real gold standard again. (honestly I will also learn how to post links soon as well !!!!!)

The best answer I could offer for your question would be that the money that already excists whether in paper or in numbers on computers will always be there but eventually will become worth something real in actual value over time. Unless legislation is passed making "promisary notes" no longer valid.

Sorry for bad spellings on the run here.

Originally posted by gncnew


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Please educate me. AND FOR THE LOVE OF ALL THATS GOOD - Don't soap box here, I'm looking for an answer to a question, not your personal rant about the topic.

Educate you?

Start here

www.investopedia.com...

Happy investing!

All original wealth comes from and out of the earth.

Yes if the Nation or the World Economy was on a gold standard the Nations that have large Gold reserves would find themselves with an abundance of wealth. But these Nations already enjoy this status.

With a return to a gold standard speculators will be removed from the market. One would actually need to have the assets to make the purchase desired, including Nations. No more leveraged buyouts could occur. All loans would have to be backed by someone with a real asset, no more fractional loans would occur, and this is what has gotten us into this mess, anyway.

The topic is complex to begin with but the value of something is only worth what the next person is willing to pay for it.

In this example gold, or for that matter black gold or any other highly sought after commodity that we chose to back our currency on would inevitably have to be valued based on a "basket" of goods that would be partially decided by "people."

For example, an ounce of gold or a barrel of oil would be worth, 8 bananas, 10 apples, 1 lb. of cotton, and a handful of others. This way the value of gold/ black gold would not be determined by a system that prints or restricts the flow but based on a world basket that everyone has access to and each country helps determine its worth by supply and demand.

This same idea is the way ideally that many economist have suggest a world currency that would be based on a basket of current currency.

In the end, whichever country has the most gold would benefit the most from a gold standard, not sure if America has the most gold though. Hope that helps.

reply to post by gncnew


In reality nothing. Gold has no real worth either. We could attach it to a swath of commodities such as wheat and oil, but then the government would have to regulate those commodities to control manipulation. We could attach it to a global index of other currencies, but then it would still be manipulatable.

Money is created by the Fed, and also by the Treasuries, and also by the Banks, and also by bartering in tangibles and in-kind agreements.

The real benefit to Ron Paul's plan is that he will remove the government's meddling with currencies and markets. If we are going to have a truly "free market" then we must let it react freely. We can't call it a free market and then regulate certain aspects, bail out some companies, and play favoritism from situation to situation. It is either free or it isn't.

The system is broke and a change is needed. I agree that the fed must go as there is too little oversight and too many conflicts of interest with its structure. The international community is working on how to sort out these and other issues with the global financial system to get a bit more integrity and cohesion into the system. The most likely idea I have heard so far is to base money on not just gold, but a collection off assets like other metals, resources and property. This way there will be a big enough asset pool to get rid of leverage and the problems this creates.

One idea I do like is to have money backed by nothing, but supply is limited to the population to allow them to transact. When getting to the heart of money, it is just a self regulating ledger book that allows a person to measure their input and output to society. A ledger book is backed by nothing and just keeps track of cash flow. Unfortunately this world has too many greedy individuals and without a transparent banking system to keep everyone accountable it will not work.

As for the plan for a gold back standard, it will wipe the slate clean of all these crazy accounting practices and take things back to a more stable banking system. At the moment there does not seam to be enough gold in America to implement this without high levels of leverage, including silver, platinum and other metals will provide a better chance of raising the assets needed for the transition. It will be tough for some in the financial industry to adapt as their gravy train comes to an end, but overall it will help reinstate some integrity back into the dollar.

Originally posted by davidgrouchy
I think the only magic bullet left is to demand
fully open books for the wall street banks,
not the Federal Reserve. Those are
supposed to be public stocks.

David Grouchy

Well... The other magic bullet I have told You about - release overunity (free energy) technology from black ops. Get rid of the need for money altogether. For others who may not have seen, I offer several threads here and My free novella on ATS media:

The End of Entropy - the foundation - read first

www.abovetopsecret.com...

The Ethical Planetarian Party Platform - the structure

www.abovetopsecret.com...


Here's a simple schematic for drawing on the plenum ("dark"/Zero Point/Radiant/Orgone/...) energy:

www.abovetopsecret.com...


The Abundance Paradigm:

media.abovetopsecret.com...

If We can spread these ideas, We can remove power over others in favor of autonomous control over self.

Originally posted by Amaterasu

Originally posted by davidgrouchy
I think the only magic bullet left is to demand
fully open books for the wall street banks,
not the Federal Reserve. Those are
supposed to be public stocks.

David Grouchy

Well... The other magic bullet I have told You about - release overunity (free energy) technology from black ops. Get rid of the need for money altogether. For others who may not have seen, I offer several threads here and My free novella on ATS media:

The End of Entropy - the foundation - read first

www.abovetopsecret.com...

The Ethical Planetarian Party Platform - the structure

www.abovetopsecret.com...


Here's a simple schematic for drawing on the plenum ("dark"/Zero Point/Radiant/Orgone/...) energy:

www.abovetopsecret.com...


The Abundance Paradigm:

media.abovetopsecret.com...

If We can spread these ideas, We can remove power over others in favor of autonomous control over self.

Releasing technology will not eliminate the need for money. Back when everyone made fire on their own - there was still a need to barter.

Money has only taken the place of bartering goods and services because it's an easier means of trade (carrying furs around is a lot more work the some ca$h money yo!).

Originally posted by gncnew

Originally posted by Amaterasu

Originally posted by davidgrouchy
I think the only magic bullet left is to demand
fully open books for the wall street banks,
not the Federal Reserve. Those are
supposed to be public stocks.

David Grouchy

Well... The other magic bullet I have told You about - release overunity (free energy) technology from black ops. Get rid of the need for money altogether. For others who may not have seen, I offer several threads here and My free novella on ATS media:

The End of Entropy - the foundation - read first

www.abovetopsecret.com...

The Ethical Planetarian Party Platform - the structure

www.abovetopsecret.com...


Here's a simple schematic for drawing on the plenum ("dark"/Zero Point/Radiant/Orgone/...) energy:

www.abovetopsecret.com...


The Abundance Paradigm:

media.abovetopsecret.com...

If We can spread these ideas, We can remove power over others in favor of autonomous control over self.

Releasing technology will not eliminate the need for money. Back when everyone made fire on their own - there was still a need to barter.

You miss the mechanism. Money, being an accounting tool for meaningful energy expended, becomes moot when:

1. The thing it represents is applied directly (energy)

2. Human energy is no longer required (not saying Humans can't work; just that it would no longer be REQUIRED) when We add robots to the mix. This makes the "barter" days not a valid comparison.

As the plenum energy is added to the economy, money will deflate - but rather than the unsupported deflation of energy scarcity, this deflation will be supported by the direct energy availability.

The driving force in deflating the currency is that the cost of energy will be removed from all processes:

The energy to take ore out of the ground - 100% of the cost
The energy to process the ore - minus the cost of the ore (based on the cost of the energy to mine it), 100% of the cost
The energy to shape and mold the metals - minus the cost of the processed ore (all based on the energy), 100% of the cost
The energy to assemble the pieces - minus the cost of the pieces (all based on energy costs), 100% of the costs
The energy to ship the products - minus the cost of the products (all based on energy), 100% of the cost
The energy to stock the shelves...

Well I hope You can see My point here. Removing the cost of the energy all down the line eventually leads to no cost at all.

So... Releasing the overunity tech will indeed remove the need for money - specifically for the fact that We can replace Human energy use with robotic energy. In any time past, before the advent of robotics, removing the cost of external energy would NOT remove the need for money, because Human energy would still be required and would need to be payed for.

Money has only taken the place of bartering goods and services because it's an easier means of trade (carrying furs around is a lot more work the some ca$h money yo!).

In a world where Human energy is needed, and therefore needs a mode of exchange, You're right. But that is not today's world, and that is what makes Now unique in the Human history We have. Only Now do We have the wherewithal to accomplish the freeing of Humanity to high and more creative opportunities. Rather than slaving for wages, each of Us can choose the path of Our bliss, and live, if We choose, at the levels today's elite live at.

So this is why Your assessment fails. [smile]