USA Needs to go back to the Gold Standard

[Accountable]

We need to start somewhere, but let's at least get started, right?

 

[theREDdot]

Great topic, always wanted to know some of these info.

But one question, so how is America backing up the value of the 'Dollar' ?

 

[Accountable]

We're not, currently. Neither are any of the other developed nations. It's called a fiat economy. Our money is worth what we say it's worth, simply because we say so. Other nations accept our money because our government and economy are stable. All that is changing now.

 

[Accountable]

Kudlow Defends Dollar, Lashes Out Against Fed “Loose Money” Policy | Phil’s Stock World

Link has a really interesting video.

Kudlow Defends Dollar, Lashes Out Against Fed “Loose Money” Policy

Courtesy of Tyler Durden

If there is one sure sign of an impending apocalypse, it is listening to Kudlow and agreeing with (at least a few) of the things he is saying. The fact that David Malpass, Peter Navarro, Rick Santelli and the abovementioned are all on the same page, is 100% confirmation that an ELE is headed our way. Rick Santelli nails it as always: "watch what gold is doing because that is a no confidence vote in fiscal and dollar policy." Followed up by several critical observations from Navarro: "If China fixes their exchange rate, it makes it impossible for the trade imbalances to self correct. Isn’t it the single greatest threat to free trade we have right now in the world? Ask the Brazilians, the Russians, the Taiwanese: it’s killing the world economy because as the dollar goes down it is dragging the yuan with it because of the hard peg to the dollar" and "the world is now going back toward a gold standard." And lastly, this rhetorical pearl from a Dr Jekyll and Mr. Kudlow: it appears the CNBC anchor is a different person before and after 6pm: "When has a nation devalued themselves into prosperity?" We hope Mr. Bernanke will answer this simple query at his next circlejerk peroration.

 

[theREDdot]

You think we would go back to the Gold Standard? I mean like my dollar is just literally printed paper, and if I do not believe it's worth anything than it's really nothing. All this 'economy' is just faith !?!?

 

[Accountable]

Faith ... and hope ... and change ... in your pocket.

As for going back to the gold standard, I think the political power hounds are already strung out on the limitless high the fiat dollar gives them so they'll never give it up until it's taken away from them. A gold standard means no more trillion-dollar gifts to political buddies, no more welfare state, no more going to war on a whim and telling the public to go shopping. It would mean banks would have to consider risk when making loans, and "too big to fail" would become the punch line it should have been all along. We would have to live within our means. Going back to the gold standard would send the typical Washington politician into DTs.

 

[nova]

You think we would go back to the Gold Standard? I mean like my dollar is just literally printed paper, and if I do not believe it's worth anything than it's really nothing. All this 'economy' is just faith !?!?

More like confidence. You mentally assign value to that money based on the confidence that you can take that money anywhere in the country and exchange it for goods and services. The only reason you can actually do that is a combination of other people's confidence in the same thing combined with the fact that the gov't dictates by law that people have to take it as payment.

If the gov't got weak enough they couldn't enforce that law and people stopped accepting the dollar everywhere, then the value would go down.

Its a little bit of a mental stretch to drop your normal definitions of "value" and think of money as nothing more than a commodity with a "value" all its own that fluctuates...

 

[JanieDough]

i agree we need to go back to the gold standard.

spending paper money seems a little horrible.

and i mean that figuratively because I am not trying to suggest we use actual gold, just that we have the gold to back it up....

 

[theREDdot]

How long do you think before the Chinese Yuan beat the Dollar?

 

[Accountable]

Define "beat." The Chinese economy is still not as large as ours but it's growing like gangbusters and ours is shrinking.

 

[JanieDough]

How long do you think before the Chinese Yuan beat the Dollar?

isn't it real close if not there already?

 

[nova]

isn't it real close if not there already?

No its not because the Chinese are artificiallly pegging their currency lower than the dollar in order to keep their exports affordable. The ultimate effect is akin to the Chinese gov't subsidizing the purchases of Chinese goods we make.

 

[JanieDough]

No its not because the Chinese are artificiallly pegging their currency lower than the dollar in order to keep their exports affordable. The ultimate effect is akin to the Chinese gov't subsidizing the purchases of Chinese goods we make.

so when they stop doing that we are really in the shitter aren't we?

 

[Accountable]

CNBC interviewed Ron Paul today.

Video - CNBC.com

Remarks after the interview:

Video - CNBC.com

 

[theREDdot]

You think Ron Paul is a great guy?

 

[Accountable]

He seems to be the only one who understands that our Constitution is his current job description, not some relic from forgotten history.

 

[JanieDough]

but the constitution can be used so vaguely to any argument...

 

[Accountable]

but the constitution can be used so vaguely to any argument...

True, lawyers and professional politicians can twist any phrase to mean whatever they want. The scumbags in Washington use that "General Welfare" phrase to cover spending any amount of money and limit an ever-growing number of liberties.

In this case it's clear. Article 2, section 8 says that it's Congress' responsibility "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures ..." Congress created the Fed and delegated their responsibility to it without amending the Constitution. They gave it full authority over monetary policy with no checks or balances. The Federal Reserve Act gives "oversight" to Congress, but the Fed has secret meetings with no requirement to tell who was there or what was discussed or decided. Decisions do not have to be ratified (approved) by anyone in the government. There's no provision I've found to override or reverse anything the Fed does.

The Federal Reserve is a completely independent entity created outside of constitutional limitations.

 

[nova]

True, lawyers and professional politicians can twist any phrase to mean whatever they want. The scumbags in Washington use that "General Welfare" phrase to cover spending any amount of money and limit an ever-growing number of liberties.

My argument against that BS is and always will be this. The guys that wrote the Constitution were not stupid, they knew exactly what they were doing. The Constitution was intended to be a strict limitation on what the Fed. gov't could do. They would not have written in all those limitations just to drop a clause in at the end that amounts to "BTW, just go do WTF ever you wanna do."

 

[Accountable]

An opposing view:

LINK: Fed 'reform' we don't want

This guy is priceless. "... the Fed, more than any other government agency, arguably stopped last fall's financial panic from becoming a global depression." What he conveniently misses is the minor detail that the Fed and its policies are at the root of how the financial panic even came to be! "Elastic" fiat money makes it possible for Congress and banks to ignore budgets, risk, and reality. They create money out of thin air to inflate various economic bubbles, making our economy seem larger and stronger than it really is. If we can only keep things going until the election, everything will be okay .....