Comments on: Gold-backed dollar a myth http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/ Fresh, daily analysis of mineral industry news and trends Thu, 04 Dec 2008 05:20:35 +0000 http://wordpress.org/?v=2.6 By: TaxiDriver http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-498 TaxiDriver Sat, 12 Jul 2008 20:33:36 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-498 I agree that everyone should read up on their history before expounding on the merits (or lack thereof) of the Gold Standard. I also agree that everyone should stop ragging on Nixon for abolishing it. The reason for both of my positions is simple: Nixon DID NOT abolish the Gold Standard, F D Roosevelt did in 1933 by outlawing the private ownership of gold. Thereafter, the US government kept the ostensibly gold backing "reserve" in Fort Knox, but only a fraction of the amount that would be required to redeem the entire dollar money supply. The notion of a gold standard when private ownership of gold itself is criminalized is a joke at best and a fraudulent charade at worst. Nixon merely ended the pretense of a de facto non-gold standard, in an economy where it was becoming increasingly a sword of Damoclese over the government's head, as the actual gold reserves as a fraction of the money supply continued to spiral in the downward direction. So, the US only had a "real" gold standard for 33 years, from 1900 (with the adoption of the gold standard act), to 1933, with Roosevelt's outlawing of gold ownership. Coincidentally, those were pretty lean years for the US economy. I say coincidentally because I do not wish anyone to infer that I mean causally. Taxi Driver I agree that everyone should read up on their history before expounding on the merits (or lack thereof) of the Gold Standard. I also agree that everyone should stop ragging on Nixon for abolishing it.

The reason for both of my positions is simple:

Nixon DID NOT abolish the Gold Standard, F D Roosevelt did in 1933 by outlawing the private ownership of gold. Thereafter, the US government kept the ostensibly gold backing “reserve” in Fort Knox, but only a fraction of the amount that would be required to redeem the entire dollar money supply.

The notion of a gold standard when private ownership of gold itself is criminalized is a joke at best and a fraudulent charade at worst.

Nixon merely ended the pretense of a de facto non-gold standard, in an economy where it was becoming increasingly a sword of Damoclese over the government’s head, as the actual gold reserves as a fraction of the money supply continued to spiral in the downward direction.

So, the US only had a “real” gold standard for 33 years, from 1900 (with the adoption of the gold standard act), to 1933, with Roosevelt’s outlawing of gold ownership. Coincidentally, those were pretty lean years for the US economy. I say coincidentally because I do not wish anyone to infer that I mean causally.

Taxi Driver

]]> By: The BarkerLetter http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-432 The BarkerLetter Mon, 05 May 2008 20:01:39 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-432 Yeah? Then prove it. Yeah? Then prove it.

]]> By: James Cyr http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-431 James Cyr Mon, 05 May 2008 19:04:22 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-431 I think you need to do a bit more research and thinking before you post such an article. What happened when some US bigwigs tried to corner the silver market? A gold-backed dollar is NOT a myth but is a viable economic reality, should you do some looking into it! I think you need to do a bit more research and thinking before you post such an article. What happened when some US bigwigs tried to corner the silver market? A gold-backed dollar is NOT a myth but is a viable economic reality, should you do some looking into it!

]]> By: The BarkerLetter http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-430 The BarkerLetter Sun, 04 May 2008 23:14:21 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-430 Countries and financial organizations such as the IMF hold reserves of gold to diversify their assets, just like investors do. To hold gold exclusively, or to peg the value of a currency to it, defeats the entire purpose of ‘diversification’. Everyone agrees that investors should have at least 10% of their portfolio in gold. My question to you, and to Matthew, and to Frank is merely this — does gold comprise your entire portfolio? And if not, then why not? If you think an entire nation’s net worth should be valued in gold, why shouldn’t yours, as an individual? Because it would be folly, that’s why. And I don’t know any sophisticated investor who would dispute that. Gold is a commodity whose pricing is subject to the vicissitudes of supply and demand. The dollar is a commodity too, whose value is determined not just by supply and demand, but also by a set of constantly changing economic data including GDP, balance of trade, rate of inflation, competitiveness, interest rates, productivity, tariffs, and others. Why not be as diversified as possible? Countries and financial organizations such as the IMF hold reserves of gold to diversify their assets, just like investors do. To hold gold exclusively, or to peg the value of a currency to it, defeats the entire purpose of ‘diversification’.

Everyone agrees that investors should have at least 10% of their portfolio in gold. My question to you, and to Matthew, and to Frank is merely this — does gold comprise your entire portfolio? And if not, then why not? If you think an entire nation’s net worth should be valued in gold, why shouldn’t yours, as an individual?

Because it would be folly, that’s why. And I don’t know any sophisticated investor who would dispute that.

Gold is a commodity whose pricing is subject to the vicissitudes of supply and demand. The dollar is a commodity too, whose value is determined not just by supply and demand, but also by a set of constantly changing economic data including GDP, balance of trade, rate of inflation, competitiveness, interest rates, productivity, tariffs, and others.

Why not be as diversified as possible?

]]> By: Francisco Almeida http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-423 Francisco Almeida Sat, 03 May 2008 22:06:43 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-423 The whole logic of statements that base this article, is foud into this little extract: - ..." Wouldn’t a gold backed dollar essentially hand over control of the currency to whoever owns the rest?". But, hold on ! It's undeniable fact that gold hoardings are scattered all over the world !!! Therefore NO ONE would be able to do it !!! Besides, picking another piece from your article: ... "The U.S. owns a mere quarter of that". Wait a minute !!! what you mean with a "mere" quarter ??? That's HUGE share !!! Thereafter, the whole of the article sinks like a stone in water. The whole logic of statements that base this article, is foud into this little extract:

- …” Wouldn’t a gold backed dollar essentially hand over control of the currency to whoever owns the rest?”.

But, hold on ! It’s undeniable fact that gold hoardings are scattered all over the world !!! Therefore NO ONE would be able to do it !!!

Besides, picking another piece from your article: … “The U.S. owns a mere quarter of that”.

Wait a minute !!! what you mean with a “mere” quarter ???
That’s HUGE share !!!

Thereafter, the whole of the article sinks like a stone in water.

]]> By: The BarkerLetter http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-422 The BarkerLetter Sat, 03 May 2008 18:31:05 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-422 The whole financial system is rigged. Look, I'm not interested in knowing all the dirty little secrets the bankers keep to themselves. I only want to figure out what their next move is going to be so I can get ahead of the curve and make a buck. That's the only thing worth knowing. The whole financial system is rigged.
Look, I’m not interested in knowing all the dirty little secrets the bankers keep to themselves. I only want to figure out what their next move is going to be so I can get ahead of the curve and make a buck.
That’s the only thing worth knowing.

]]> By: Matthew http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-421 Matthew Fri, 02 May 2008 19:54:17 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-421 Wow. You actually accept the current inflation numbers as accurate. What do you think the number would be if we used a real basket of goods like how the CPI was in 1980 before hedonic adjustments, substitution and other "innovations"? It's amazing what one can do with the CPI when one is on the hook for cost of living increases to Social Security, public employee union agreements and whatnot. FYI, pre-Clinton CPI is around 7% and 1980 CPI measurement has us at just over 11%. Of 3.98%, 7% and 11%, which do you feel actually reflects the increases in the cost of living experienced by the average American over the last year? Only someone who's out of touch with reality would say the 3.98% calculated through the "modern" innovative methods. It's also humorous that you think those deciding monetary policy are actually accountable elected officials. Are the Fed governors elected? What about the chairman? Is the Fed open to an audit? Has it ever been audited? Wow. You actually accept the current inflation numbers as accurate. What do you think the number would be if we used a real basket of goods like how the CPI was in 1980 before hedonic adjustments, substitution and other “innovations”? It’s amazing what one can do with the CPI when one is on the hook for cost of living increases to Social Security, public employee union agreements and whatnot.

FYI, pre-Clinton CPI is around 7% and 1980 CPI measurement has us at just over 11%. Of 3.98%, 7% and 11%, which do you feel actually reflects the increases in the cost of living experienced by the average American over the last year? Only someone who’s out of touch with reality would say the 3.98% calculated through the “modern” innovative methods.

It’s also humorous that you think those deciding monetary policy are actually accountable elected officials. Are the Fed governors elected? What about the chairman? Is the Fed open to an audit? Has it ever been audited?

]]> By: The BarkerLetter http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-411 The BarkerLetter Thu, 01 May 2008 01:31:30 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-411 ... 3.98% in March doesn't seem very 'hyper' to me, Frank. … 3.98% in March doesn’t seem very ‘hyper’ to me, Frank.

]]> By: Frank http://barkerletter.mining.com/2008/04/30/gold-backed-dollar-a-myth/#comment-410 Frank Wed, 30 Apr 2008 23:53:45 +0000 http://barkerletter.blog.infomine.com/2008/04/30/gold-backed-dollar-a-myth/#comment-410 You obviously have no idea about the ramifications of hyper-inflation. You obviously have no idea about the ramifications of hyper-inflation.

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