It is a pipe dream to think the US can ever get back onto the gold standard. - Page 4 - Politics Forum.org | PoFo

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#14868902
Rugoz wrote:Jesus, where does your obsession with gold come from? In the purely hypothetical case of hyperinflation the FED would have to shrink its balance sheet to restore price stability. That's the (medium-term) goal of monetary policy and incompatible with the gold standard. I repeat: The gold standard is incompatible with price stability as it's commonly understood by economists.


There is no obsession. And as I said, there is a lot of ifs and buts. But all I am observing from the US recently (and arguably since 2008) is the foundations of implosion of the global financial network without the ability of self control. The rich are LITERALLY destroying their own house for increased greed. I am seeing increased debt personal/international, reduction in tax income, division of class, isolation from international opinion and policy, pissing off OPEC and no signs of much needed financial stimulus from the US since Trump took over control inside The White House. I look at the size of their debt, the reliance of the way the financial system favours the dollar and how the dollar requires its demand and all I see for the future of the Dollar (probably at the end of the petro-dollar) is a complete destruction of the financial system and a hyperinflation of the Dollar that rivals the Zimbabwean dollar. The only saving grace for the US is their commodities. Perhaps I am a pessimist. Perhaps I am scare mongering, but I do genuinely believe the US will avert back to the gold standard at some point - at least at a temporary measure. But I could be wrong.
#14868908
B0ycey wrote:There is no obsession. And as I said, there is a lot of ifs and buts. But all I am observing from the US recently (and arguably since 2008) is the foundations of implosion of the global financial network without the ability of self control. The rich are LITERALLY destroying their own house for increased greed. I am seeing increased debt personal/international, reduction in tax income, division of class, isolation from international opinion and policy, pissing off OPEC and no signs of much needed financial stimulus from the US since Trump took over control inside The White House. I look at the size of their debt, the reliance of the way the financial system favours the dollar and how the dollar requires its demand and all I see for the future of the Dollar (probably at the end of the petro-dollar) is a complete destruction of the financial system and a hyperinflation of the Dollar that rivals the Zimbabwean dollar. The only saving grace for the US is their commodities. Perhaps I am a pessimist. Perhaps I am scare mongering, but I do genuinely believe the US will avert back to the gold standard at some point - at least at a temporary measure. But I could be wrong.


I suggest looking up what the gold standard actually means, namely that the amount of currency in circulation is directly determined by the amount of gold you own. Then I suggest you look up what that means for price stability in a modern economy, preferably avoiding websites from conspiracy nutters and Wikipedia. And yes, you are wrong. The gold standard will never come back unless the white house is occupied by a downright moron....ok....not even then, unless a nuclear war throws it back to the stone age.
#14868911
Rugoz wrote:I suggest looking up what the gold standard actually means, namely that the amount of currency in circulation is directly determined by the amount of gold you own. Then I suggest you look up what that means for price stability in a modern economy, preferably avoiding websites from conspiracy nutters and Wikipedia. And yes, you are wrong. The gold standard will never come back unless the white house is occupied by a downright moron....ok....not even then, unless a nuclear war throws it back to the stone age.


I am aware of what the gold standard means @Rugoz, and the inflation price required for its return. And yes, not even Trump would return to the gold standard in todays economy as it has yet to implode. I am talking about a hypothetical scenario that I believe -unless a change in direction can take place from the lobbyists inside the White House, will happen in the near future (perhaps decades). It would never be the choice for a US president to return to the gold standard system. It would be a prevention scenario. They would tie the dollar to a commodity to set a stable value for the currency. And under a financial crisis the value of minerals shoots up too (so it would make sense to do so under that circumstance).
#14868927
Rugoz wrote:Tying a currency to a commodity is not necessary to stabilize it. Volcker didn't do it in the 80s, in fact no country did it since the end of Bretton Woods.
I think I tried more or less every angle so I'll just leave you to your believes until you have a better understanding of the subject.


Actually @Rugoz, I think it is you who needs a better understanding on the subject. But I agree, I believe it is better we parts ways as we cannot agree. But I cannot resist but say to you that there are plenty of currencies tied to a commodity or pegged to a currency out there today. Not everything is fiat. To suggest that the Dollar will remain so under a complete destruction in the financial system is naive to say the least.
#14868935
B0ycey wrote:Actually @Rugoz, I think it is you who needs a better understanding on the subject. But I agree, I believe it is better we parts ways as we cannot agree. But I cannot resist but say to you that there are plenty of currencies tied to a commodity or pegged to a currency out there today. Not everything is fiat. To suggest that the Dollar will remain so under a complete destruction in the financial system is naive to say the least.


Well, I guess I would grant you a better understanding if you had made a single good argument. Start with naming me a currency that is tied to a commodity as you just claimed.
#14868937
Rugoz wrote:Well, I guess I would grant you a better understanding if you had made a single good argument. Start with naming me a currency that is tied to a commodity as you just claimed.


Apologies for you not understanding my point. Not that it matters. I thought we agreed to part ways.

http://www.usfunds.com/investor-library/frank-talk/5-world-currencies-that-are-closely-tied-to-commodities/#.WimWRJWDPIU

Just use google next time. And with that, it really is the last word on my part on the subject until the subject changes away from hyperinflation.
#14868949
Rugoz wrote:Jesus, where does your obsession with gold come from? In the purely hypothetical case of hyperinflation the FED would have to shrink its balance sheet to restore price stability. That's the (medium-term) goal of monetary policy and incompatible with the gold standard. I repeat: The gold standard is incompatible with price stability as it's commonly understood by economists.

I quoted Rugoz as I agree with this.

Karl Polayni was a tremendous critic of the gold standard system of international settlement. With its emergence, suddenly people in all countries had to contend with price fluctuations based not just on the market for a given item, but also the fluctuations to the price of money, determined by the international gold flows.

Polayni, who was Hungarian and was wounded as an artillery officer for the Hapsburgs in WW1, believed the destabilizing effects of the gold standard were responsible for the emergence of two world wars; it was largely this which makes up the substance of the 'Great Transformation', which he identifies in the title of his 1944 volume.

Polayni can be a little tricky, his ideas aren't entirely worked out; but he's perhaps the foremost critic of economic liberalism, and had some innovative observations to bear on the present subject.
Last edited by Crantag on 07 Dec 2017 21:40, edited 2 times in total.
#14868954
B0ycey wrote:Apologies for you not understanding my point. Not that it matters. I thought we agreed to part ways.

http://www.usfunds.com/investor-library/frank-talk/5-world-currencies-that-are-closely-tied-to-commodities/#.WimWRJWDPIU

Just use google next time. And with that, it really is the last word on my part on the subject until the subject changes away from hyperinflation.


Out with a fart I guess.

1) The fact that the exchange rate of major commodity exporters roughly follows commodity prices is not surprising at all.
2) Those graphs have different scales on the left and right axis. As you can see, the commodity prices are far more volatile than the exchange rate. If Canada had the "oil standard", both would have to move one to one. Your claim that any of those countries have tied their currencies to commodities is nonsense.
3) Imagine what a central bank would have to do if it had the "oil standard". If the oil price spikes, it would have to increase interest rates in order to match the exchange rate, tanking the economy. Now you could argue the oil price more or less follows the global business cycle, so I guess it could be worse, that doesn't mean it's a reason to do it.
4) If Canada absolutely dominated the global oil market, like the US after WW2 when it owned 3/4 of the world's gold, its monetary policy wouldn't be constrained by the "oil standard", or only marginally so.
#14869075
Sorry, my mistake.
I needed to say "a pipe dream unless there is a nuclear war or the US has to pay reparations in gold for losing a war with [China??] or climate change kills off billions."

I thought that was obvious, but go figure.

After 20% of the world's population is killed by 1 of the above 3 possible events it seems like a different world to me.

And I very much doubt that the US will get into hyperinflation in any other way. Why the fuck would it? What could possibly be gained by destroying the world's economic system? MMT does not call for that level of deficits, not at all. MMT warns against such behavior.
#14869148
The end of Bretton Woods was the biggest gold heist / scam in history but the gold standard was also a scam. Gold doesn't need to be fixed to paper dollars to get its value, it has had that by itself since the dawn of time and will always have it, gold was fixed to dollars to make worthless dollars something other than worthless paper. The gold standard was the bait and the end of bretton woods was the switch in a classic bait and switch scam to defraud vast amounts of gold out of people. The same kind of people that carried out those two scams in the past can do it again using the same gold they swindled out of people before to then swindle all the value left in the dollars by going back on the gold standard but with dollars pegged at grossly weak ratio for the dollar, ie: $100mil to the ounce. Hah hah. It would be an epic wheeze.

1. give your flakey bakey paper money some value by riding it on gold. [gold standard]
2. Once you have holy-moley metric tonnes of other people's gold in your vaults in trust and have issued / spent crazy-dazy quantities of dollars (far more than is appropriate for the amount of gold you hold) break the link and keep the gold! [end of bretton woods]
3. Shore up the value freefall in dollars by leaning on OPEC countries to only trade oil for dollars. [petro-dollar]
4. Run up gargantuan debts denominated in dollars. [where we are now]
5. Re-institute the gold standard at a ratio which vastly favours the gold you hold to the disfavour of the all those that hold your dollar denominated debts. Discharge all those debts at virtually no cost to yourself with a fraction of the gold.
----
Start again at step 1, rinse and repeat. :excited:

There is a diabolical genius at work here that it is hard not to admire.

#14869335
Steve_American wrote:No need really to reply to SolarCross, and hard to do in more than 1 line.

That is some conspiracy theory. Time wise it spans 100 to 200+ years.

There is no evidence for it except that it does fit the chain of events.

The motivations for each step were almost certainly not the ones he says.


I'll admit that was a flight of fancy; there is no need to invoke ageless devils, larceny all on its own is immortal.
#14869752
SolarCross wrote:1. give your flakey bakey paper money some value by riding it on gold. [gold standard]
2. Once you have holy-moley metric tonnes of other people's gold in your vaults in trust and have issued / spent crazy-dazy quantities of dollars (far more than is appropriate for the amount of gold you hold) break the link and keep the gold! [end of bretton woods]


That makes no sense, take a look at US gold reserves:

Image

After WW2 the US owned 3/4 of the world's gold reserves, far more than it needed to back the dollar. The FED increased the monetary base, as one would expect, and since the supply of gold didn't grow, at least not at the same rate, people started converting dollars into gold until the price of gold matched the FED's dollar-gold exchange rate. Consequently the US had to tap into more and more of its reserves to support the dollar until it ran out of reserves.
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