Originally Posted By SSG-69:
No state shall coin money, emit bills of credit, or make any thing but gold and silver coin a tender in payment of debts. ~ Art. I, sec. 10, cl. 1

Originally Posted By R2point0:
Why do you think paper currency is more easily counterfeited than gold coins?

Originally Posted By Ilovemykids5:
Inflation is not 3%. People tend to not understand what inflation is or how it is calculated in the modern day

Originally Posted By Ilovemykids5:
Gold did badly in the early 80s especially due partially to the absurdly high interest rates. People could get great returns on cash.

You’re interested in “great ROI” but you know that dollars aren’t money, right?

Originally Posted By PikeSlayer:
I have 2 things:

1) a BIG pile of stock market money

2) a BIG pile of gold and silver

One of those 2 piles I never even think or worry about. There have been times I have forgotten about this pile for years.

The other pile I monitor daily. Sometimes 4 or 5 times daily.

Originally Posted By Lou_Daks:

Then what is it?  In your opinion, of course.  No guesses.  We require actual numbers, not estimates.

Originally Posted By Lou_Daks:
Let play a thought game.  Let's say a company has a major breakthrough in technology.  And let's say we are on a gold standard, with the price set at $X.  Now let's say the company's value doubles due to the breakthrough invention.  Theoretically, it should take twice the number of ounces to buy a share of that stock, because the price of gold has been "fixed" by the govt.  But what if the physical gold does not exist to represent the company's doubling of value.  It hasn't been mined.

Does the company's increased value not really exist?  Do we deny the contribution the company has made toward the betterment of society?  "Sorry, man, we don't have enough gold in the stockpile to justify your new value.  You'll have to wait until someone mines it.  Come back Monday."

Originally Posted By SperlingPE:



The concept of value is based on the gold.  You don’t have to have to believe in it.  Your example is not invalid but if a company is believed to have become more valuable, that just means that only people with the amount of gold required to buy the stock can buy it.  This is actually part of the reason the gold standard was probably discontinued.  Money is only a way of keeping score it has no real value.

Originally Posted By Ilovemykids5:


MoM, annualized ~10%. This is just keeping track of costs, buying the same exact stuff. Of course, per CPI, if you’re able to survive without food & energy, then yes inflation is ~3%

Originally Posted By Coati:


You are changing the goal posts.  YOU set 1967-2007 as the benchmark.  I noted gold was a better store of value than USD during that period.  

Now you're upset that I didn't pull a different goal post out of my ass to be "the last few years" which weren't even covered by your argument.

I mean exactly what I've said.  Not that gold is a perfect store of value.  Damning that my response covered your stated period rather than your little bait and switch is downright duplicitous and bad faith.

Originally Posted By Lou_Daks:

lol

How much fuel do you buy?

Here is a breakdown of the average household expenditure:

https://www.visualcapitalist.com/average-u-s-household-budget-in-one-chart/

Transportation is 13%, but that's not just fuel.  It's a car payment, maint., insurance etc.  Groceries are 6%.  Housing is 25% all by itself.

I dunno anything about your budget but 10% annualized is way out of wack.  Also, I asked for some real numbers & data.  You provided an "estimate" again.  Approx. 10% is not a real number.

Originally Posted By Lou_Daks:
Let play a thought game.  Let's say a company has a major breakthrough in technology.  And let's say we are on a gold standard, with the price set at $X.  Now let's say the company's value doubles due to the breakthrough invention.  Theoretically, it should take twice the number of ounces to buy a share of that stock, because the price of gold has been "fixed" by the govt.  But what if the physical gold does not exist to represent the company's doubling of value.  It hasn't been mined.

Does the company's increased value not really exist?  Do we deny the contribution the company has made toward the betterment of society?  "Sorry, man, we don't have enough gold in the stockpile to justify your new value.  You'll have to wait until someone mines it.  Come back Monday."

Originally Posted By MHowski:


The stock goes up in value because people are willing to pay more.  The stock doesn’t just double because their profit goes up.  People need more of whatever they are using to buy the stock, USD, gold or whatever.  

The constraint you are thinking of is what if the company needs to borrow money to make it happen.  More money than they can raise with investors or stock offerings.  They need a loan. The loan is the constraint.  When a loan is made, money is created and the flipside is the debt needs to be repaid.  Without that money creation it becomes difficult for companies to do things.  The problem is that there is a lot of money being created, and instead of being repaid it is being continuously reshuffled so much so that the financial wizardry becomes a product in and of itself.  How to make money, keep some, and then keep reshuffling.  

I don’t think a gold standard works btw.

Originally Posted By tveddy:
I will say the petrodollar in the setting of a ballanced budget would be preferable. Gold is just a great way to prevent over production of money cause you have to have gold. At this point i would prefer austerity measures to trying to go back to the gold standard. I would also prefer our government set up a sovereign wealth fund that eventually does away with taxes

Originally Posted By R2point0:
He said 10% MoM, annualized. That's 120% annual inflation.

Originally Posted By Lou_Daks:

Well, yes.  We have far more debt than we should.  We print to cover the debt.  The gold standard would not solve this for the many reasons posted above.

Originally Posted By tveddy:

I didnt state it very clearly. I would prefer petro dollar and austerity over trying to return to gold

Originally Posted By Lou_Daks:

Might work, or not.  There are some real downsides in allowing foreign countries who happen to have a lot of oil to determine the value of the USD depending on whether they want to pump, or not.

Originally Posted By engineer61:
The gold standard is bad for every country.
The problem is that there isn't enough gold, and your economy can't grow to meet the population increases that happen as you run out of money being circulated. The U.S. history shows this clearly, the U.S. being in recession in the 1820's that caused Jackson to get elected whose solution was to remove the federal govt bank that issued money, thinking that having private banks being able to issue paper money would solve the problem - which was not enough money in circulation. The real solution came from the gold finds in Georgia that led to the relocation of the Indians to Oklahoma and the Trail of Tears. With the California gold rush the economy had lots of money to pay for the Civil War and the huge increase in manufacturing capability in the U.S. during the middle of the 1800's. The gold finds that followed in South Dakota and other western areas kept the economy well supplied with money for several more decades. The "free silver" movement of the 1880's and later was caused by the economy running out of enough money in circulation, causing the banks to start limiting loans to farmers who depended on those loans to buy the seed to plant their crops. As expected the banks limited their lending to people most able to pay the loan back, which meant the farmers weren't getting the money they needed to run their farms as they were least able to pay the loans back. The next recession then happened in the early 1890's as the economy had undergone huge growth and needed more money to circulate, which was neatly solved by the gold discoveries in Alaska, which supplied the economy with money through WWI. Then the roaring twenties happened, and the money supply wasn't enough to handle the economic expansion, so the brokerages stepped in by creating massive amounts of money through allowing margin buying with "money" that didn't exist anywhere except on their books. That's a major reason why the Great Depression was so bad, so many brokerages and people going through bankruptcy, destroying that money that only existed in account ledgers and not in gold. Why the solution that FDR implemented first was to get off the gold standard and implementing financial regulations that limit private bank money creation, making the banks borrow from the federal reserve to create new "money" instead of just creating it on their books.
Trying to go back to the gold standard would mean reducing the money supply to a tiny fraction of what's available now. The problem with not having enough money to run your economy is that only the very rich will get loans from banks to start new or expand existing business - banks lend to people who can pay the loan back, and loan first to people who really don't need the loan in the first place but don't want to use their own private funds to increase the size of their business. This results in the economy running down fast as not enough new businesses can be created to handle population increase, the economy not able to provide the jobs needed to keep people employed.
Notice that the major claim many people make about the gold standard - that you won't get recessions and depressions - is contradicted by U.S. history. We had several recessions and the Great Depression start during the time we were on the gold standard; so no, being on the gold standard will NOT mean the end of recessions  but result in new recessions and depressions happening BECAUSE of being on the gold standard.

Originally Posted By DarkLordVader:
Is it a personal choice.

If you want to be on the gold standard,  go convert all your assets to gold.  Sell what you need to meet monthly expenses.

Originally Posted By Lou_Daks:

Thank you.  This is a good historical perspective on exaclty what I've been posting.

tl;dr Bottom line: The gold supply cannot possibly keep up with a modern, dynamic economy.  Our economy grows 87,000,0000X faster than all the miners in the world can produce the shiny yellow metal at a fixed price, which is exactly what a "standard" requires.  If the gold price is allowed to "float" to keep up, then it's no longer a "standard".

Originally Posted By R2point0:
There's also a practical aspect - the US is effectively mined out of gold and silver. The major deposits are in foreign countries, and the major mining companies aren't American either. Yes, gold is fungible, but do we really want our money supply controlled by people who aren't us?

Originally Posted By MHowski:


Gotcha.  Your point is about true wealth creation, making something worth more than the sum of its parts.  Wealth is created but there is no mechanism to make more gold to balance that out.  You end up with a currency so constrained it becomes so valuable no one wants to spend it.  It gets hoarded, and the cycle gets worse.

Unfortunately I don’t think it ends well for us, what we are doing now.  Everyday we are borrowing against the future more than can be repaid fast enough.  But the world will keep going regardless of whatever politics and economics and monetary policy does to us as a country.  It’s just a matter of what shape it will take.