What if we reinstated the gold standard?

Jump to Last Post 1-4 of 4 discussions (16 posts)
  1. rhamson profile image70
    rhamsonposted 11 years ago

    What if we reinstated the gold standard to evaluate the dollar in its' current distribution. Since the debt standard has been blown apart in recent years could a real precious metal you can touch make a comeback?

    1. profile image0
      JaxsonRaineposted 11 years agoin reply to this

      Then we would deal with the problems that go along with the gold standard, instead of dealing with the problems that go with fiat money

      1. rhamson profile image70
        rhamsonposted 11 years agoin reply to this

        To quote Judge Dred "I knew you would say that".

        1. profile image0
          JaxsonRaineposted 11 years agoin reply to this

          Cool, I guess.

    2. innersmiff profile image67
      innersmiffposted 11 years agoin reply to this

      I'm sure the world governments will attempt to push fiat currency as far as it can go, and subsequently cause even more destruction first. We will be forced to base our currency on a hard asset at some point, it's only a matter of time.

      1. profile image0
        JaxsonRaineposted 11 years agoin reply to this

        Why? Fiat money is inevitably priced according to supply and demand, just as gold-backed currency. Neither system is 'better', both have pros and cons.

        1. innersmiff profile image67
          innersmiffposted 11 years agoin reply to this

          The thing is that fiat money would have essentially no demand if it were not forced upon the population. How much is un-backed paper really worth? Legalise the competing currency and then the market will decide which is better. The likelihood is that a new common currency would arise based on hard metal like gold or silver, as they are scarce, durable and portable. As it is, the fiat dollar has been astonishingly bad against gold, and will continue to worsen.

    3. Don W profile image80
      Don Wposted 11 years agoin reply to this

      The problem is more fundamental than that in my opinion. Fractional reserve banking allows banks to loan 9 times the amount they actually have in deposits. This money is literally created out of nothing and expands the money supply. Expanding the money supply without a proportional increase of goods and services creates inflation. So the fractional reserve system is inherently inflationary. Over the last 90 years the value of a dollar has dropped 96% in correlation to an increase in the money supply over the same period.

      What's worse is that more money means more debt, because money only exists as debt. It is brought into existence out of thin air by the Fed when the government issues bonds, effectively IOUs. Other banks also create money in the same way. So money only comes into existence through loans. Every dollar in existence is therefore owed to someone. So if everyone paid off their debts (including the government) there would be no money in circulation! That means that debt is perpetually increasing, and the value of money is constantly decreasing leading to a disequilibrium. As a result people have to compete to sell their labour in order to pool enough money to pay for the cost of living which continues to increase.

      If that's not bad enough, the real fraud is the application of interest. Every dollar in existence must be returned to a bank with interest. But if all money is only created through what is borrowed, where does the money needed to pay interest come from? It doesn't exist. So the amount of money owed to banks is always greater than the amount of money it is possible to pay them back. So fractional reserve banking creates a perpetual deficit. This system means there is literally not enough money in existence to cover all costs. So there must always be a person or group of people somewhere who do not have enough money. Bankruptcy and poverty are therefore inevitable and built in to the system. As ownership of property secured with a loan transfers to the bank in the event of a default, this means that the transfer of wealth to banks is inevitable and built in to the system.

      People sell their labour to pay their debts, but the perpetual debt and inflation inherent in the system means people will always be required to sell their labour. Add to that the scarcity of money created through the application of interest (there is never enough money) and what you realise is that the fractional reserve system, used in every country of the world, is in fact a modern form of slavery. Human beings become no more than wages slaves, running in circles to pay costs that keep rising with money that is losing value, and trying to clear debts that society can never be clear of. And anyone who questions this system is labelled a kook, an anarchist, a socialist, a terrorist by those with a vested interest in maintaining the status quo. The bankers and the corporations and governments they support.

      No, I think the problem is about more than what gets used as currency. It's about whether there's an alternative way to live in which people are not slaves to an economic system at all.

      1. rhamson profile image70
        rhamsonposted 11 years agoin reply to this

        It may sound very simple but if you revalue the dollar from its current worth in gold at $1,500.00 to say what we have in circulation to what the Federal Government gold holdings are, that would be the new standard and countries would be forced to hold to that new atandard rather than speculation which we have found out is highly unstable. The value could be as much as three or four hundred thousand or higher for an ounce. Inflation would still be a relative term as the new evaluation would not change how we trade the dollar in goods or services as the money would have a basis by which it is established. Putting a freeze on the printing of new money would be halted and stabilization would occur.

  2. psycheskinner profile image77
    psycheskinnerposted 11 years ago

    What else is there to say?  All developed nations deserted the gold standard decades ago, and it was for a good reason.

    1. innersmiff profile image67
      innersmiffposted 11 years agoin reply to this

      A good reason from the governments' and their banker employers' point of view, sure lol

  3. paradigmsearch profile image60
    paradigmsearchposted 11 years ago

    http://3.bp.blogspot.com/-uSULFaBORr8/T0gBrcCSJTI/AAAAAAAAAFk/mHgnTK3I7HY/s1600/gold.jpg
    Just dreaming out loud here...

  4. tedriese profile image59
    tedrieseposted 11 years ago

    Fiat currencies are innately unstable and the cause economic bubbles that burst sooner rather than later.  Abandonning the Brecken-Woods contract was a fatal flaw in our economic policy that only served to increase the profits of the bankers in the short-term so that they could make a quick grab to obtain assets - When the bubble bursts the next time it's going to crack the current system and the global leaders will have no other choice but to pin the new global economy to a hard commodity of some sort if they actually seek stability.  Otherwise they will just be deliberately creating another bubble for another short-term asset grab, which the global system cannot sustain any longer... If they attempt to do this I expect large scale wars to break out  as a result of the majority of the emerging nations begin to abandon the USD as the world's primary reserve currency, which evidence suggests has already begun.

    1. rhamson profile image70
      rhamsonposted 11 years agoin reply to this

      The fiat based system has a sliding scale which is inherently unstable as the value is determined by the people who trade it.

      What would happen if the US dollar was based on an ounce of gold with a freeze on its value? Valuating the dollar to stand still would allow trading to be done on an even keel with others and prevent the Fed to just print money and politically adjust its value. This freeze on its' value could run ten to twenty years.

      1. tedriese profile image59
        tedrieseposted 11 years agoin reply to this

        The Brecken-Woods contract lasted closer to about 35 years while it was intact, I think, and some of the statistics suggest that it helped to usher in a period of stability - What some consider to be a golden age of growth and prosperity.  Since it was deactivated, real-wages for the common worker within the United States have streadily declined and the percentage of earning that gets paid to the average worker compared to their level of productivity has diminished sharply.  There is a small group of people inside of the USA economy that benefited greatly from the removal of the gold standard but everybody else got the short end of the stick.

        1. rhamson profile image70
          rhamsonposted 11 years agoin reply to this

          Putting the currency under the control of the Fed was a big mistake so some means has to be found to stabilize the dollar as Saudi Arabia had been threatening for years to switch to Euros as their standard for their currency. The rhetoric did stop when the EU economy collapsed but just think what would have happened had they made the switch. To stabilize the dollar could determine where and when we begin to find our bottom.

 
working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)