Alan Greenspan: Bring Back the Gold Standard

MattyG35 · January 25, 2011, 8:27pm

[quote]Brother Chris wrote:

[quote]MattyG35 wrote:
Sorry for my incompetence but what I don’t understand is why would a bank run devalue the dollar? Did people withdraw paper money or did people start taking their gold out, and then the bank had to limit how much they could lend? Why did Uncle Sam raise the price of gold?
[/quote]

Didn’t have the money to support a war or their spending, and in 1913 they set up the income tax they didn’t want a revolt on their hands by increasing taxes (shows how much people really supported what the Government was doing), so they just printed more money and made the dollar worth less to pay for their spending.

[quote]
I get that if France is getting 60 cents on what should be a dollar that would raise prices, but I don’t get why the price was raised in the first place.
I’ve heard about the new deal. Gist = gov’t outlaws citizens from owning gold, and confiscate(steal) as much as they can. yes/no?[/quote]

New deal was a plan to get us out of the recession, it can be blamed on Keynesian economics directly, and the fact is that the New Deal, even though the Greatest generation supposedly thinks it was an awesome plan by an otherwise awesome president, was a horrible plan not only for getting us out of the recession, but also for the country.

A oz of gold was redeemable for a $20 bank note. So the exchange rate was 1 oz of gold = $20, they government printed more money to bring it up to 20/35th of an oz for $20.

So:

Original
1 oz = $20

After they printed more money
1 oz = $35

The value of the banknotes were devalued, they could buy less. By the 1973 it was $42 an oz.

1 oz = $42

When we went off the Gold Standard in 1973 it quickly shot up.

1 oz = $102

Our dollar was serious devalued, part of the original devaluing was because Britain asked us to devalue our money because of what they owed us during WWII, just like we’re asking China to devalue their money for what we owe them.

Look at the price today

1 oz = $1334

1334/20 = 66.7…our money supply has increased around 6600%
20/1334 = .015…our money has been devalued to the point that our money is worth 1.5% of what it did in 1932…according to gold.[/quote]

Ouch.
Thanks for the explantion.
Is there any recourse that you know of to fix this?

Brother_Chris · January 25, 2011, 10:25pm

[quote]MattyG35 wrote:

[quote]Brother Chris wrote:

[quote]MattyG35 wrote:
Sorry for my incompetence but what I don’t understand is why would a bank run devalue the dollar? Did people withdraw paper money or did people start taking their gold out, and then the bank had to limit how much they could lend? Why did Uncle Sam raise the price of gold?
[/quote]

Didn’t have the money to support a war or their spending, and in 1913 they set up the income tax they didn’t want a revolt on their hands by increasing taxes (shows how much people really supported what the Government was doing), so they just printed more money and made the dollar worth less to pay for their spending.

[quote]
I get that if France is getting 60 cents on what should be a dollar that would raise prices, but I don’t get why the price was raised in the first place.
I’ve heard about the new deal. Gist = gov’t outlaws citizens from owning gold, and confiscate(steal) as much as they can. yes/no?[/quote]

New deal was a plan to get us out of the recession, it can be blamed on Keynesian economics directly, and the fact is that the New Deal, even though the Greatest generation supposedly thinks it was an awesome plan by an otherwise awesome president, was a horrible plan not only for getting us out of the recession, but also for the country.

A oz of gold was redeemable for a $20 bank note. So the exchange rate was 1 oz of gold = $20, they government printed more money to bring it up to 20/35th of an oz for $20.

So:

Original
1 oz = $20

After they printed more money
1 oz = $35

The value of the banknotes were devalued, they could buy less. By the 1973 it was $42 an oz.

1 oz = $42

When we went off the Gold Standard in 1973 it quickly shot up.

1 oz = $102

Our dollar was serious devalued, part of the original devaluing was because Britain asked us to devalue our money because of what they owed us during WWII, just like we’re asking China to devalue their money for what we owe them.

Look at the price today

1 oz = $1334

1334/20 = 66.7…our money supply has increased around 6600%
20/1334 = .015…our money has been devalued to the point that our money is worth 1.5% of what it did in 1932…according to gold.[/quote]

Ouch.
Thanks for the explantion.
Is there any recourse that you know of to fix this?[/quote]

Crash the dollar.

MattyG35 · January 25, 2011, 10:50pm

[quote]Brother Chris wrote:
Crash the dollar.[/quote]

Ok, gotta start from scratch.

Brother_Chris · January 25, 2011, 11:23pm

[quote]MattyG35 wrote:

[quote]Brother Chris wrote:
Crash the dollar.[/quote]

Ok, gotta start from scratch.[/quote]

Or, they can reissue new currency that is on the gold standard (preferably back at the $20 mark), ran privately preferably, and exchanged privately, at a fixed rate, the new money for the U.S. Dollar, give a 6-12 month grace period and after that get rid of the U.S. Dollar.

I unno, I just thought that up.

MattyG35 · January 25, 2011, 11:41pm

That’s sort of like when Europe moved to the Euro, there was a ‘grace period’ as you call it to exchange your money for the new currency. I know some farmers(?) ran into trouble b/c they were unaware of what was going on, so it was extended for them.

John_S1 · January 26, 2011, 7:43am

[quote]MattyG35 wrote:
That’s sort of like when Europe moved to the Euro, there was a ‘grace period’ as you call it to exchange your money for the new currency. I know some farmers(?) ran into trouble b/c they were unaware of what was going on, so it was extended for them.[/quote]

The problem with a grace period for our dollar, since it is the reserve currency is that we are going to hyperinflate well before we have the balls to issue a new currency. It is going to be a start from scratch solution.

Not to mention 70% of the dollars in existance are outside the united states. Better to crash the dollar then to give 70% of the gold away.

skaz05 · January 27, 2011, 1:51am

[quote]Brother Chris wrote:

[quote]Big Banana wrote:

[quote]Brother Chris wrote:

[quote]Big Banana wrote:

[quote]orion wrote:
It is interesting that he knew that before he was head of the Fed, that he knows it now and that he tripled the money supply anyway.

[/quote]

Yup. He is an asshole. He knew it was wrong and he did it anyway.[/quote]

Um…Greenspan didn’t take us off the gold standard. Once we were off that it all went to hell.[/quote]

Who said he took us off the gold standard? He increased the money supply. He artificially adjusted interest rates.[/quote]

Yes, and as all inflationary policies do they collapse a countries’ currency. Greenspan sped up the process, FDR cranked the generator to the printing press.[/quote]

You all do know that Greenspan actually tried to keep interest rates and inflation within a range of the price of gold. Have any of you read his memoirs? It only touches on his theory of monetary policy, but it’s a fantastic look inside his thought process.

Anyway, my opinion, the gold standard is as outdated as the musket. There isn’t enough gold in the world to match the value of all the dollars in circulation around the globe, regardless.

The amount of gold that the U.S. holds is a whopping 300 billion. Chump change. Maybe I’m not clear on what proponents of the gold standard are saying, but from where I sit it sounds like a load of BS.

Brother_Chris · January 27, 2011, 5:17am

[quote]skaz05 wrote:

[quote]Brother Chris wrote:

[quote]Big Banana wrote:

[quote]Brother Chris wrote:

[quote]Big Banana wrote:

[quote]orion wrote:
It is interesting that he knew that before he was head of the Fed, that he knows it now and that he tripled the money supply anyway.

[/quote]

Yup. He is an asshole. He knew it was wrong and he did it anyway.[/quote]

Um…Greenspan didn’t take us off the gold standard. Once we were off that it all went to hell.[/quote]

Who said he took us off the gold standard? He increased the money supply. He artificially adjusted interest rates.[/quote]

Yes, and as all inflationary policies do they collapse a countries’ currency. Greenspan sped up the process, FDR cranked the generator to the printing press.[/quote]

You all do know that Greenspan actually tried to keep interest rates and inflation within a range of the price of gold. Have any of you read his memoirs? It only touches on his theory of monetary policy, but it’s a fantastic look inside his thought process.[/quote]

Yes, I have read his memoirs, and I know his friends, and I know his actions.

Um…what? That is not how the Gold standard works.

[quote]
The amount of gold that the U.S. holds is a whopping 300 billion. Chump change. Maybe I’m not clear on what proponents of the gold standard are saying, but from where I sit it sounds like a load of BS.[/quote]

Yes, and all the cotton that the ink is printed on is worth 50 million dollars. What is your point?

John_S1 · January 27, 2011, 7:58am

If gold is the currency, then the value of all things will be priced in it. If we have 300 billion ounces of Gold then the prices will reflect it. As we mine more Gold/silver prices will adjust.

Peoples lives will actually better because unlike now when increase in tech is masked by inflation they will actually see the dropping of price. Thus with that same ounce of Gold they have saved they buy more. And as Gold restricts government more and more businesses flock to the US and so do investers. Thus bringing in more and advancing our wealth. This is how we became rich.

Also with the Gold standard only the best can survive so we will always get lower prices thus increasing our purchasing power. And since our currency would be real money since it holds it’s value over time peoples savings would actually mean something when they retire.

Gold worked up untill the FED was created. And it can work again. It will take a year or so to go through the system, and yes that year will be really bad but afterwords we will experiance a boom like the world has never seen before. It will be the industrial revolution 2.0.

Big_Banana · January 27, 2011, 3:28pm

[quote]skaz05 wrote:

[quote]Brother Chris wrote:

[quote]Big Banana wrote:

[quote]Brother Chris wrote:

[quote]Big Banana wrote:

[quote]orion wrote:
It is interesting that he knew that before he was head of the Fed, that he knows it now and that he tripled the money supply anyway.

[/quote]

Yup. He is an asshole. He knew it was wrong and he did it anyway.[/quote]

Um…Greenspan didn’t take us off the gold standard. Once we were off that it all went to hell.[/quote]

Who said he took us off the gold standard? He increased the money supply. He artificially adjusted interest rates.[/quote]

Yes, and as all inflationary policies do they collapse a countries’ currency. Greenspan sped up the process, FDR cranked the generator to the printing press.[/quote]

You all do know that Greenspan actually tried to keep interest rates and inflation within a range of the price of gold. Have any of you read his memoirs? It only touches on his theory of monetary policy, but it’s a fantastic look inside his thought process.

Anyway, my opinion, the gold standard is as outdated as the musket. There isn’t enough gold in the world to match the value of all the dollars in circulation around the globe, regardless.

The amount of gold that the U.S. holds is a whopping 300 billion. Chump change. Maybe I’m not clear on what proponents of the gold standard are saying, but from where I sit it sounds like a load of BS.[/quote]

I have not read his memoirs but he must be insane if he thought he was doing a good job.

Gold standard is old news, never coming back. It is a shame so many otherwise right minded people still harp on it.

LIFTICVSMAXIMVS · January 27, 2011, 4:23pm

[quote]Big Banana wrote:
Gold standard is old news, never coming back. It is a shame so many otherwise right minded people still harp on it.[/quote]

We harp on it because honest money is important to freedom. Do you see a problem with just the old gold standard or hard currencies in general?

Brother_Chris · January 27, 2011, 4:50pm