Afraid to Mention 'Gold'?

In article ,
Jerry Dennis wrote:

Let the world go to hell in a handbasket and gold will be essentially
worthless. When that happens working weapons, ammunition, food and
water will make anyone rich.

Well, the appeal is that gold will not become devalued if the dollar
does something screwy but society does not collapse utterly. Think
Germany between the wars. And if one country collapses into chaos
but others do not, gold is one medium of exchange that will still be
useful in dealing with the countries that still have something like
normal commerce. Finally, when society recovers to the point of
needing the concept of "money" once again, gold is a good bet. But
sure, in a Mad Max Beyond Thunderdome world, Alcohol, Tobacco, and
Firearms will be more economically useful than gold.

--
Please reply to: | "If more of us valued food and cheer and song
pciszek at panix dot com | above hoarded gold, it would be a merrier world."
Autoreply is disabled | --Thorin Oakenshield

On Thursday, September 20, 2012 2:20:56 PM UTC-5, Paul Ciszek wrote:
In article , Jerry Dennis wrote: Let the world go to hell in a handbasket and gold will be essentially worthless. When that happens working weapons, ammunition, food and water will make anyone rich. Well, the appeal is that gold will not become devalued if the dollar does something screwy but society does not collapse utterly. Think Germany between the wars. And if one country collapses into chaos but others do not, gold is one medium of exchange that will still be useful in dealing with the countries that still have something like normal commerce. Finally, when society recovers to the point of needing the concept of "money" once again, gold is a good bet. But sure, in a Mad Max Beyond Thunderdome world, Alcohol, Tobacco, and Firearms will be more economically useful than gold. -- Please reply to: | "If more of us valued food and cheer and song pciszek at panix dot com | above hoarded gold, it would be a merrier world." Autoreply is disabled | --Thorin Oakenshield

What Jerry and some other miss is that our national pauperization is already well underway. Gold sovereigns that cost $16 in 1968 now cost $425; Gold Centenarios that cost $79 dollar in 1970 now cost over $2000. The centennial Canada $20 gold that cost $35 at issue in 1967-68 is a $850 item or so.

No, you won't be able to use Gold at the rock bottom, and at many times using gold will be inefficient compared to using silver for many small purchases. Gold is more of a "time machine" to take significant wealth to some future point where they start to rebuild a collapsed society.

The gold will do well no matter whatever the naysayers come up with. It has been the anti-establishment investment for 40+ years.

See that Paul Fergusson Book "When Money Dies" for a great review of Weimar Germany and Post-World War I Austria (and to a lesser extent Hungary).

oly

The b

On Thursday, September 20, 2012 3:10:26 PM UTC-5, oly wrote:
On Thursday, September 20, 2012 2:20:56 PM UTC-5, Paul Ciszek wrote: In article , Jerry Dennis wrote: Let the world go to hell in a handbasket and gold will be essentially worthless. When that happens working weapons, ammunition, food and water will make anyone rich. Well, the appeal is that gold will not become devalued if the dollar does something screwy but society does not collapse utterly. Think Germany between the wars. And if one country collapses into chaos but others do not, gold is one medium of exchange that will still be useful in dealing with the countries that still have something like normal commerce. Finally, when society recovers to the point of needing the concept of "money" once again, gold is a good bet. But sure, in a Mad Max Beyond Thunderdome world, Alcohol, Tobacco, and Firearms will be more economically useful than gold. -- Please reply to: | "If more of us valued food and cheer and song pciszek at panix dot com | above hoarded gold, it would be a merrier world." Autoreply is disabled | --Thorin Oakenshield What Jerry and some other miss is that our national pauperization is already well underway. Gold sovereigns that cost $16 in 1968 now cost $425; Gold Centenarios that cost $79 dollar in 1970 now cost over $2000. The centennial Canada $20 gold that cost $35 at issue in 1967-68 is a $850 item or so. No, you won't be able to use Gold at the rock bottom, and at many times using gold will be inefficient compared to using silver for many small purchases. Gold is more of a "time machine" to take significant wealth to some future point where they start to rebuild a collapsed society. The gold will do well no matter whatever the naysayers come up with. It has been the anti-establishment investment for 40+ years. See that Paul Fergusson Book "When Money Dies" for a great review of Weimar Germany and Post-World War I Austria (and to a lesser extent Hungary). oly

The name should be "Adam Fergusson" and you ought to get a copy. Great read. Gives new meaning to the small pre-war and wartime silver Austrian One Korona coins in one's collection.

oly

On 8/30/2012 8:15 PM, Frank Galikanokus wrote:

Can anyone tell me just how we get back on the gold standard?

In my opinion, the people advocating a gold standard are pining
for a fictional past.

The United States was never really on a gold standard. At no point
in history did a United States citizen holding a dollar denominated
government debt have a right to redeem that debt for a fixed amount of
gold. The Government always had the option of paying the debt off
either in silver or paper.

In order to get to a gold standard at this point in history, the
United States would have to create a new legal tender currency,
which for purposes of this hypothetical example I'll call a Paulie.
The Treasury would then have to obtain and keep a certain amount of
gold (such as a decigram) in a repository for each Paulie it issued,
and agree to exchange each Paulie for a centigram of gold on demand.

One problem with a gold standard is that even a gram of gold is fairly
small and easily lost, much less a decigram. The need for minor
denominations was one of the attractions of bimetallism, but how you
account for them under a true gold standard is not an easy problem to
solve.

Alas, the typical reason governments create new currency is because the
old one has collapsed from inflation. The dilemma is that if had a
State the monetary discipline to adhere to a gold standard, they wouldn't
have gotten into the mess in the first place.

Would big government have to step in and end speculation on a commodity
like gold?

No. As long as there are people there will be speculators. Ending
it is impossible. But what the government can do is to become a
market maker.

A speculator would never pay more than 1 Paulie for a decigram
of gold because they could always buy it from the government at that
price. If the price of gold dropped below 1 Paulie per decigram
due to a glut, the government could print new Paulies and use them
to buy gold to reestablish the equilibrium.

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz

In article ,
Mike Benveniste wrote:

In order to get to a gold standard at this point in history, the
United States would have to create a new legal tender currency,
which for purposes of this hypothetical example I'll call a Paulie.
The Treasury would then have to obtain and keep a certain amount of
gold (such as a decigram) in a repository for each Paulie it issued,
and agree to exchange each Paulie for a centigram of gold on demand.

Don't reserve ratios usually work the other way around?

One problem with a gold standard is that even a gram of gold is fairly
small and easily lost, much less a decigram. The need for minor
denominations was one of the attractions of bimetallism, but how you
account for them under a true gold standard is not an easy problem to
solve.

If you had a strict silver standard, it would make the day-to-day
use of actual metal coins more doable, but even the staunchest
teapartiers and paulites would get tired of hauling 8 pounds of
silver home from the bank every payday and would eventually be
willing to consider notes and electronic funds transfer as
alternatives. With silver having more industrial demand compared
to current reserves (so I am told) than gold, a strictly silver
based currency could get interesting.


--
Please reply to: | "If more of us valued food and cheer and song
pciszek at panix dot com | above hoarded gold, it would be a merrier world."
Autoreply is disabled | --Thorin Oakenshield

On Sep 21, 5:25*pm, (Paul Ciszek) wrote:
In article ,
Mike Benveniste wrote:



In order to get to a gold standard at this point in history, the
United States would have to create a new legal tender currency,
which for purposes of this hypothetical example I'll call a Paulie.
The Treasury would then have to obtain and keep a certain amount of
gold (such as a decigram) in a repository for each Paulie it issued,
and agree to exchange each Paulie for a centigram of gold on demand.

Don't reserve ratios usually work the other way around?

One problem with a gold standard is that even a gram of gold is fairly
small and easily lost, much less a decigram. *The need for minor
denominations was one of the attractions of bimetallism, but how you
account for them under a true gold standard is not an easy problem to
solve.

If you had a strict silver standard, it would make the day-to-day
use of actual metal coins more doable, but even the staunchest
teapartiers and paulites would get tired of hauling 8 pounds of
silver home from the bank every payday and would eventually be
willing to consider notes and electronic funds transfer as
alternatives. *With silver having more industrial demand compared
to current reserves (so I am told) than gold, a strictly silver
based currency could get interesting.

--
Please reply to: * * * * *| "If more of us valued food and cheer and song
pciszek at panix dot com *| above hoarded gold, it would be a merrier world."
Autoreply is disabled * * | * * * --Thorin Oakenshield

When you read a historical diary like Samuel Pepys (covered the 1660s
in Restoration England) you are quickly impressed with the amount of
precious metals - in the form of coin and plate - that a up and coming
but still middle class man like Pepys kept around the house (Pepys was
a government functionary and graft was rather more acceptable then
than now). Banking (based upon precious metals and paper) as we know
it was just getting started at that moment in time.

oly

On 9/21/2012 6:25 PM, Paul Ciszek wrote:

Don't reserve ratios usually work the other way around?

I don't know what you mean by "the other way around." In the
hypothetical I proposed, the reserve ratio is 1:1 -- one
decigram of gold held for each Paulie note issued. The
reciprocal is not necessarily true; a government could hold
_more_ gold than needed to redeem the currency, but never less.

If you had a strict silver standard, it would make the day-to-day
use of actual metal coins more doable, but even the staunchest
teapartiers and paulites would get tired of hauling 8 pounds of
silver home from the bank every payday...

Even a silver standard would (and did) require subsidiary coins. The
smallest U.S. silver coin ever made was the 3-cent silver piece at 14mm
and 7.5 grams of 90% silver. Today the silver value of that coin is
just about $0.75.

The transfer of credit via bills of exchange is not inconsistent
with a strict "hard money" standard, and in fact the two coexisted
for a very long time. Other names for a negotiable bill of exchange
include a check or cheque...

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz

"Mike Benveniste" wrote in message
...
On 8/30/2012 8:15 PM, Frank Galikanokus wrote:

Can anyone tell me just how we get back on the gold standard?

In my opinion, the people advocating a gold standard are pining
for a fictional past.

The United States was never really on a gold standard. At no point
in history did a United States citizen holding a dollar denominated
government debt have a right to redeem that debt for a fixed amount of
gold.

Ever hear of a gold certificate?

http://en.wikipedia.org/wiki/Gold_certificate

"The gold certificate was used from 1863 to 1933 in the United States as a
form of paper currency. Each certificate gave its holder title to its
corresponding amount of gold coin. "
....
"After 1879, the government was willing to redeem United States Notes at
face value in gold, bringing the United States Notes into parity with gold
certificates, making the latter also a candidate for general circulation."


--
Richard
Blessed is the man who expects nothing, for he shall never be
disappointed" -- the ninth beatitude.
Alexander Pope (1688-1744) English poet


The Government always had the option of paying the debt off
either in silver or paper.

In order to get to a gold standard at this point in history, the
United States would have to create a new legal tender currency,
which for purposes of this hypothetical example I'll call a Paulie.
The Treasury would then have to obtain and keep a certain amount of
gold (such as a decigram) in a repository for each Paulie it issued,
and agree to exchange each Paulie for a centigram of gold on demand.

One problem with a gold standard is that even a gram of gold is fairly
small and easily lost, much less a decigram. The need for minor
denominations was one of the attractions of bimetallism, but how you
account for them under a true gold standard is not an easy problem to
solve.

Alas, the typical reason governments create new currency is because the
old one has collapsed from inflation. The dilemma is that if had a
State the monetary discipline to adhere to a gold standard, they wouldn't
have gotten into the mess in the first place.

Would big government have to step in and end speculation on a commodity
like gold?

No. As long as there are people there will be speculators. Ending
it is impossible. But what the government can do is to become a
market maker.

A speculator would never pay more than 1 Paulie for a decigram
of gold because they could always buy it from the government at that
price. If the price of gold dropped below 1 Paulie per decigram
due to a glut, the government could print new Paulies and use them
to buy gold to reestablish the equilibrium.

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz

On 9/23/2012 9:09 AM, Richard L. Hall wrote:
Ever hear of a gold certificate?

http://en.wikipedia.org/wiki/Gold_certificate

"The gold certificate was used from 1863 to 1933 in the United States
as a form of paper currency. Each certificate gave its holder title
to its corresponding amount of gold coin. "

Yes, I've heard of a Gold Certificate. But it was never the only
type of debt issued by the government, nor even the dominant type,
and for a portion of that period the Government only promised redemption
at an indefinite future date.

"After 1879, the government was willing to redeem United States Notes
at face value in gold, bringing the United States Notes into parity
with gold certificates, making the latter also a candidate for
general circulation."

The Government was _willing_ to, but there was no legal requirement to
do so. The Redemption Act of 1875 required redemption of paper money
"in coin" starting in 1879, but by that time silver dollars were
once again legal tender, and they remained so even after the Gold
Standard Act of 1900.

At a couple of points in the 1890's, the Government was seriously
considering suspending redemptions in gold. That's part of what caused
the Panic of 1893. It took a loan of $65 million dollars of gold by
J.P. Morgan to prevent the suspension.

--
Mike Benveniste -- (Clarification Required)
You don't have to sort of enhance reality. There is nothing
stranger than truth. -- Annie Leibovitz

In article ,
Mike Benveniste wrote:
On 9/21/2012 6:25 PM, Paul Ciszek wrote:

Don't reserve ratios usually work the other way around?

I don't know what you mean by "the other way around." In the
hypothetical I proposed, the reserve ratio is 1:1 -- one
decigram of gold held for each Paulie note issued. The
reciprocal is not necessarily true; a government could hold
_more_ gold than needed to redeem the currency, but never less.

That's why I found this statement a bit puzzling:

The Treasury would then have to obtain and keep a certain amount of
gold (such as a decigram) in a repository for each Paulie it issued,
and agree to exchange each Paulie for a centigram of gold on demand.

(I shouldn't give you a hard time--the prefixes for dividing units
by ten or a hundred have fallen out of use except for the centimeter
and the medical use of the deciliter.)

If you had a strict silver standard, it would make the day-to-day
use of actual metal coins more doable, but even the staunchest
teapartiers and paulites would get tired of hauling 8 pounds of
silver home from the bank every payday...

Even a silver standard would (and did) require subsidiary coins. The
smallest U.S. silver coin ever made was the 3-cent silver piece at 14mm
and 7.5 grams of 90% silver. Today the silver value of that coin is
just about $0.75.

The transfer of credit via bills of exchange is not inconsistent
with a strict "hard money" standard, and in fact the two coexisted
for a very long time. Other names for a negotiable bill of exchange
include a check or cheque...

You know that and I know that. The teapartiers and paulites, like
those state legislators who tried to introduce bills making gold
and silver coins the ONLY legal tender in their states, need to be
reminded. I figured that making them haul home 8 pounds of silver
would be a good way to do that.

Of course they would have been lynched when the economies of their
states collapsed utterly as soon as credit cards, bank transfers,
and internet commerce were shut down.

--
"Remember when teachers, public employees, Planned Parenthood, NPR and PBS
crashed the stock market, wiped out half of our 401Ks, took trillions in
TARP money, spilled oil in the Gulf of Mexico, gave themselves billions in
bonuses, and paid no taxes? Yeah, me neither."