A return to the gold standard?

[KarlMarx]

Forbes predicts a return to the gold standard.


http://www.humanevents.com/article.php?id=43439

[fj1200]

Nice article. The gold standard is not necessarily the panacea it would seem to be, we attempted to reestablish the GS post WWI and the results were questionable. The Bretton Woods system worked for awhile and only served to mask US inflationary pressures, when Nixon closed the window it released the pressure all at once as opposed to the slow release that we have today.

[DragonStryk72]

At this point, anything that helps alleviate the destabilized economy would be damned welcome. I don't want a boom economy, I just want a stable one.

[fj1200]

The Fed has done all it can, and then some unfortunately. It's up to Congress to give up a tax cut or at the very least some stability to the tax code... read no new taxes. The two-year extension is only a band aid and not even a good one.

[DragonStryk72]

The Fed has done all it can, and then some unfortunately. It's up to Congress to give up a tax cut or at the very least some stability to the tax code... read no new taxes. The two-year extension is only a band aid and not even a good one.

But even with that, much of our economic woes is our incredibly over-inflated and out-of-date tax system. Even is we repaired the current tax code, it would just get mucked up again within a few months.

[fj1200]

But even with that, much of our economic woes is our incredibly over-inflated and out-of-date tax system. Even is we repaired the current tax code, it would just get mucked up again within a few months.

Tru dat. Probably take a few years for it to get mucked though.

[DragonStryk72]

Tru dat. Probably take a few years for it to get mucked though.

I'd love to see us get back to the gold standard, and then switch over to the Fair Tax, but I'm not holding my breath on that one. It would sort out a lot of the trouble though

[SpidermanTUba]

Nice article. The gold standard is not necessarily the panacea it would seem to be, we attempted to reestablish the GS post WWI and the results were questionable. The Bretton Woods system worked for awhile and only served to mask US inflationary pressures, when Nixon closed the window it released the pressure all at once as opposed to the slow release that we have today.

Actually about 15% of a federal reserve note is backed by gold right now.

The Fed values the gold it has on its balance sheet at only $41 an oz. If you value it at market value, about 15% of the Fed's assets are that gold.

[fj1200]

Actually about 15% of a federal reserve note is backed by gold right now.

We have gold, we do not have a gold standard.

[SpidermanTUba]

We have gold, we do not have a gold standard.

I fail to see the point in maintaining a gold standard. Since its not even possible for everyone to convert their dollars into gold all at once under such a standard - its reduces to the same game, if everyone runs on the banks, we're doomed either way.

[fj1200]

I fail to see the point in maintaining a gold standard. Since its not even possible for everyone to convert their dollars into gold all at once under such a standard - its reduces to the same game, if everyone runs on the banks, we're doomed either way.

A pure gold standard gives the illusion of monetary stability with no inflation or deflation. There is no purpose to holding gold in that scenario anyway because the dollar would be "as good as gold" and you could convert into assets that actually pay interest as opposed to gold where it costs you to hold it. Having said that, a currency that is stable relative to gold would be the best scenario.

[SpidermanTUba]

A pure gold standard gives the illusion of monetary stability with no inflation or deflation. There is no purpose to holding gold in that scenario anyway because the dollar would be "as good as gold" and you could convert into assets that actually pay interest as opposed to gold where it costs you to hold it. Having said that, a currency that is stable relative to gold would be the best scenario.

But there was both inflation and deflation under the gold standard. More deflation than under not the gold standard. Deflation sucks.

[fj1200]

But there was both inflation and deflation under the gold standard. More deflation than under not the gold standard. Deflation sucks.

Exactly.