The Gold Standard

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Unca Walt said:
And I claim first patent on a $100 dollar bill that has "no gold" areas that form lines so the hundred could be "broken" into two fifties, or four twenty-fives, or ten tens, or a hundred singles. <-- Each piece containing exactly the amount of gold to value it perfectly.
Click to expand...
$100 dollar bill?
Why $?
Why dollar?

This is gold standard Unca, not fiat standard.
Gold Standard bills are denominated in gold, not in $.

A $100 dollar bill you say?
How about a 100mg gold bill?
😀

Screenshot 2024-12-20 at 22.40.58.png

Beautiful, isn't
 
^^^^^^^^^

I've been saying that a long time, now.

The dollar crash, is the end of Big Pharma's power. The end of the Green Raw Deal. The end of government handouts for things that work to DESTROY our economy.

The end of Drag Queen Story Hour. The end of hormonal and surgical mutilation of kids by the thousands. THE END OF SEXUALIZATION OF CHILDREN IN PUBLICK SKEULZ.

It reintroduces sanity into our lives. All that's needed, is to cut the control the Swamp crazies have to do all this evil.
 

Make the Dollar Great Again by Making It a Weight of Gold and Silver.​

Jan 20, 2025 #money #currency #debt

Gold and Economic Freedom by Alan Greenspan:

Make the Dollar Great Again by Making It a Weight of Gold and
41:02

00:00 Introduction
05:00 How the dollar was defined in 1792
12:58 HW Brands's Andrew Jackson - Book Recommendation
18:17 A reading of Gold and Economic Freedom by Alan Greenspan
 
Trump won't do it.

Trump, like all people who live(d) off financialization (in Trump's case, borrowed money was the bedrock for all major development projects)...he's addicted to cheap money. How many times has he said, he wants lower (even negative) interest rates?

Gold backing won't do it. A gold standard will make money SCARCE.

It would make our economy sound, but only after a massive recession unfolds from the cutting-off of all that CTRL+P money

I don't think Trump has it in him to even understand what the world looks like on the other side of the equation, as a saver or investor looking for safe, solid returns.
 
254b5a090a54c3efc7812f2e60651bee.gif
 
Casey Jones said:
You don't hold it, you don't own it.

What's to keep the holders of the gold from "fractional-reserving" the "owners" gold?
Click to expand...

I was reading today about Utah's gold backed transactional currency and I thought about our exchange back in December.

The Utah House committee has unanimously passed House Bill 306 (HB306), which aims to establish a gold and silver-backed electronic payment system for state vendors. This innovative system ... would allow the state to make payments using physical gold or silver held in vault facilities within Utah.

Pioneering Financial Reform: Utah's Bold Move Towards Gold And Silver-Backed Transactions - USAGOLD

The Utah House committee has unanimously passed House Bill 306 (HB306), which aims to establish a gold and silver-backed electronic payment system for state
www.usagold.com www.usagold.com

If you apply the "If you don't hold it you don't own it" to gold backed digital currencies, you are going to reject initiatives like this one.
 
Peter89 said:
I was reading today about Utah's gold backed transactional currency and I thought about our exchange back in December.

The Utah House committee has unanimously passed House Bill 306 (HB306), which aims to establish a gold and silver-backed electronic payment system for state vendors. This innovative system ... would allow the state to make payments using physical gold or silver held in vault facilities within Utah.

Pioneering Financial Reform: Utah's Bold Move Towards Gold And Silver-Backed Transactions - USAGOLD

The Utah House committee has unanimously passed House Bill 306 (HB306), which aims to establish a gold and silver-backed electronic payment system for state
www.usagold.com www.usagold.com

If you apply the "If you don't hold it you don't own it" to gold backed digital currencies, you are going to reject initiatives like this one.
Click to expand...
It's a step in the right direction.

It's going to require a lot of oversight, however - and rotters may see it as a challenge, as they have with check-kiting, with accounting fraud, with every other half-fast attempt to provide accountability.

Gold is like Truth. Neither need any defenders. Truth stands alone; and gold, once proven, needs only a weight and a count.

Paper "backed" by gold "held in a vault" needs a lot more.
 
We could return to a gold standard but not for international trade. Only for transactions within the US. This would be deflationary for people living within the US and the dollar could still be used for international transactions.

In order to have a gold standard for international trade the price of gold would need to go to about 125-150k an OZ to cover the debt. We would also need to export more than we import or eventually our gold is all going overseas.

Of course transacting with gold and silver within the US is already possible but not widely accepted.
 
Peter89 said:
Hello Unca

The holder of a gold backed paper currency holds in his hands a piece of paper.
The bullion represented by that piece of paper sits in a vault.

The holder of a gold backed digital currency holds an account.
The bullion represented by his digital currencies sits in a vault.

The holder of the gold backed paper currency doesn't hold/touch the gold, because the bullion sits in a vault.
The holder of the gold backed digital currency doesn't hold/touch the gold, because the bullion sits in a vault.

As far as the holding and the touching are concerned, there is no difference between gold backed paper currencies and gold backed digital currencies.

If you reject gold backed digital currencies because "If you don't hold/touch it you don't own it" - like Casey does -, logic requires that for the same reason you reject gold backed paper currencies too.

Yes?
Click to expand...
The difference is that with the gold backed currency, physical gold is payable to the bearer of the gold backed currency, on demand.

That makes it (the gold) be in your hand, not just locked in a far away vault somewhere.


searcher said:
goldseek.com

Sound Money Would Check Government More Than DOGE Can

If the Trump administration succeeds in reining in government, restoring sound money is the best way to ensure the politicians who come next won’t screw it up.
goldseek.com goldseek.com
Click to expand...
Why can't we have both?
 
Joe King said:
The difference is that with the gold backed currency, physical gold is payable to the bearer of the gold backed currency, on demand.

That makes it (the gold) be in your hand, not just locked in a far away vault somewhere.
Click to expand...
If I get you right JK, you are addressing what they call redemption: the option for the currency holder of redeeming the bullion represented by his gold backed currency, i.e. exchanging his gold backed currency for the underlying bullion.

You are right in that the option for redemption is an important criterion in order to discriminate between different gold backed currencies.
I don't know whether these initiatives for gold backed "transactional currencies" promoted by several states allow redemption. I don't even know whether the gold backed US dollar allowed redemption.

This discussion about how to apply the "If you don't touch/hold it, you don't own it" to gold backed currencies started when I mentioned gold backed digital currencies.
There are gold backed digital currencies that allow redemption.

kinesisgold.org

Redeeming KAU and KAG - Kinesis Gold

Redeeming KAU and KAG means converting them back into their underlying physical bullion, thus bridging the gap between digital currency and physical bullion ownership
kinesisgold.org kinesisgold.org
 
Casey Jones said:
You don't hold it, you don't own it.

What's to keep the holders of the gold from "fractional-reserving" the "owners" gold?
Click to expand...
Audits CJ
Independent audits conducted regularly by a company specialized in auditing commodity inventories.
Something like this one
kinesisgold.org

Kinesis Audit: Bureau Veritas Independent Audit of Kinesis Gold & Silver Holdings

The Kinesis audit took place between October 21 and October 31, 2024 through Inspectorate International (Bureau Veritas).
kinesisgold.org kinesisgold.org

The reason for the existence of fractional reserve in the gold world is lack of audits (think about the gold ETF).
I repeat: not just any kind of audit but independent audits conducted regularly by a company specialized in auditing commodity inventories.


The Trump Admin has instructed the US Treasury with repatriating the US gold reserves held in London (this is the reason for the gold inventories moving from London to NY, not the tariff hoax).
They want to bring home the US gold and then audit it.

Of course they are too smart to let the audit to be conducted by a gov agency.
The audit of the US gold reserves will be conducted by one - maybe more than one - independent companies - probably under the supervision of the US Treasury.

I read that the last audit of the US gold reserves was in 1954. There was another one in the 70es but it was just a show.
I don't know whether, how, by whom and how often the US gold reserves were audited before 1950.
 
Peter89 said:
I don't know whether these initiatives for gold backed "transactional currencies" promoted by several states allow redemption.
Click to expand...
If not, they ain't really gold backed.

The point is, if the currency being used is redeemable in the gold backing the currency, it's virtually the same thing as the gold itself circulating.


Peter89 said:
This discussion about how to apply the "If you don't touch/hold it, you don't own it" to gold backed currencies started when I mentioned gold backed digital currencies.
There are gold backed digital currencies that allow redemption.
Click to expand...
As long as there is redemption, it's all good. Both physical and digital currency.
 
Peter89 said:
The Trump Admin has instructed the US Treasury with repatriating the US gold reserves held in London (this is the reason for the gold inventories moving from London to NY, not the tariff hoax).
They want to bring home the US gold and then audit it.

Of course they are too smart to let the audit to be conducted by a gov agency.
The audit of the US gold reserves will be conducted by one - maybe more than one - independent companies - probably under the supervision of the US Treasury.

I read that the last audit of the US gold reserves was in 1954. There was another one in the 70es but it was just a show.
I don't know whether, how, by whom and how often the US gold reserves were audited before 1950.
Click to expand...

So, nobody countered my prediction.
Makes sense then
😃
 
searcher said:
Link to paper Mario mentioned in the above vid:

Human Freedom Rests on Gold Redeemable Money
By HON. HOWARD BUFFETT, U. S. Congressman from Nebraska
Reprinted from The Commercial and Financial Chronicle, May 6, 1948

Click to expand...

Same paper mentioned again by Mario in today's vid.

Who's Loading Up on All the Physical Gold? Part 2.​

Feb 28, 2025 #dollar #preciousmetals #government

Annual Letter to Berkshire Hathaway shareholders (comment about paper money on page 7: https://www.berkshirehathaway.com/let...

Human Freedom Rests on Gold redeemable Money, Howard Buffett: https://www.fgmr.com/wp-content/uploa...


45:37

Who Is Loading Up on All the Physical Gold? Part 1.

"Human Freedom Rests on Gold Redeemable Money": Howard Buffett.
 
Man, I don't know if I'm just being extra stupid today but for some reason I can't make sense of the above chart.
I've tried everything including turning my head sideways and I'm just not getting it.
Can someone explain it as if they're talking to an eighth grader?
Thanks for indulging this old man.
 
Blue bars are the marked to market value of gold relative to federal debt. Currently, the value of US gold, marked to market, is just 2% of Federal debt.

White line is ratio of federal debt to GDP.

The chart starts circa 1940 and shows how we used to have gold equivalent to 40% of Federal debt (before WWII spending blew out the debt to GDP ratio).

The text in yellow is doing a simple "this is what our current holding of gold would need to be worth to be the equivalent value of X% of Federal debt.

Classically, a gold standard maintains at least 40% gold reserves.
 
pmbug said:
Blue bars are the marked to market value of gold relative to federal debt. Currently, the value of US gold, marked to market, is just 2% of Federal debt.

White line is ratio of federal debt to GDP.

The chart starts circa 1940 and shows how we used to have gold equivalent to 40% of Federal debt (before WWII spending blew out the debt to GDP ratio).

The text in yellow is doing a simple "this is what our current holding of gold would need to be worth to be the equivalent value of X% of Federal debt.

Classically, a gold standard maintains at least 40% gold reserves.
Click to expand...
…so there’s a chance?
 
"Never tell me the odds." /Han Solo
 
Nobody else will agree mark to market based on US debt. That would be another arbitrary number.
 


A hint of something to come, or just another version of "we have the cards"?
 
Cigarlover said:
What if China really has 4 times the gold that the US has? Do they get to make the rules then?
Click to expand...
They get to try.

First they have to prove they have the gold. The Chinese leadership has a bit of a credibility problem.

THEN they have to instill TRUST. Something that was not developed during the Mao and Post-Mao era.

And still is not coming. The shoddy quality of Chinese goods do not instill trust - nor that after over 30 years of free trade with the West, they haven't found a way to improve the quality of their export products.

Japan, by comparison, was making precision optical equipment and cameras by 1965, and quality inexpensive automobiles by 1970 or so. NO progress of similar nature has been seen in what the Chinese sell. They promise more than they deliver, and charge on their empty promises.
 
China can put out a lot of low quality garbage but keep in mind it's also US corporations that are demanding that.

Lets take a larger view of things 1st. When the US sent the manufacturing base to China they sold out US workers and the US consumer. Remember sending our manufacturing over there was supposed to save us money. Thats how it was sold to us anyway. In reality we are paying prices as if they were still made here in the US. Examples would be major appliances and iPhones. 1000 plus for an iphone that costs apple 100 bucks at best. We should be paying 300 at the high end for those phones but apple decided to screw us all and pocket the difference. I've bought 50 or 60 dollar phones at family dollar that can do everything an IPHONE can do.

So while I agree the quality just isn't there in many products coming into the US from China, I dont blame China, it's mostly the US corporations lowering the quality standards. China will produce whatever US manufacturers spec. Do you really think Maytag forgot how to make washing machines that will last forever? Lets face it, washing machines aren't rocket science. There's not much to them. My Maytag was made in 1976.

China can pump out electric vehicles now for under 20k. China put a lander on the moon. China has nuclear weapons. China has submarines and missiles and a whole bunch of other stuff. In fact if the US us manufacturing anything in China than China has that technology.

China also is building an EV plant the size of San Francisco. They are planning on supplying the world with cheap EV's. Like it or not it's probably going to be China that leads the way in this century.

I like Trumps idea of bring manufacturing back to the US but in the end that's probably not going to happen. It takes years to build out manufacturing facilities and to rebuild manufacturing here is going to be extremely expensive compared to Chinese manufacturing. That being said, any company that does build any type of manufacturing here will probably use robotics to build the widgets. In the long run that could compete with China unless China is also using robotics which seems highly likely.
 
Cigarlover said:
China can put out a lot of low quality garbage but keep in mind it's also US corporations that are demanding that.
Click to expand...
I disagree. As a (former) motorcyclist, I followed the industry as it moved to parts-sourcing and even potentially, manufacturing, in China. Honda has done some of it with inexpensive scooters and sub-150cc motorcycles intended for the Third World.

Now, keep in mind, Honda's watchword was always, Quality. Honda-san built his business on that premise from when he was making motorized bicycles in the 1940s. His company grew in an industry where neither the European nor surviving American companies could.

What was learned, and keeps on repeating, is:

Honda can give the specifications, and even supply information on required tooling and procedures. Lines can be set up, and so long as there's Japanese inspectors WATCHING, all goes well.

Replace the Japanese supervisors with local Chinese, and leave them to self-supervise, and everything goes to hell. Substandard metal grades. Rotgut oil put into engines in place of high-quality lubricants, to cut costs. Painting, haphazard.

It's a CHALLENGE to them. To do the job as specified, is to let them win. The challenge, as they see it, is to collect a price for a quality product, but supply shoddy crap instead.

They have no concept of a win/win arrangement. The Japanese companies understood that manufacturer/buyer-end-user was a relationship, not a test of wills and wits.

The Chinese reject that. To this day. A company, CSC Motorcycles, sells what appears to be an attractive small-displacement trail-ready "adventure" motorcycle. It appears to rival the Honda CB500, at a far lower cost. Made in China.

Until you read what owners have gone through. Broken welds, failed suspension parts from bottoming on rough trails. Vibrations, plastics that fail from UV rays...none of this stuff happens to Honda or Suzuki or Yamaha models.

So, China is gonna sell cars? Good on them. I'm NOT going to buy them. And if I have no other option, I'm going to walk.
 
searcher said:
goldseek.com

Gold Isn't Going Up—Your Money is Just Losing Value

At its core, inflation results from the debasement of currency—in other words, the dilution of a currency’s value through excessive creation of new money.
goldseek.com goldseek.com
Click to expand...
Was there no inflation from 1980 through 2001? Was that 21 years deflationary? Why did gold go from 850 to 250 in that time period. 34 or 3500 was the inflation adjusted price from 1980 so why did it take 45 years to get there? Is it possible for gold to go back down to 2k or even 1k?
850 down to 250 is about a 70% reduction. If we get that now it take us to about 1050.

I'm just throwing this out there for discussion. I don't know the answer to these questions. What held gold back for so long? I actually didn't know anything about gold back then and had no idea where to buy it. I wish I did, I would have loaded up at 250.
 
Cigarlover said:
Was there no inflation from 1980 through 2001? Was that 21 years deflationary? Why did gold go from 850 to 250 in that time period. 34 or 3500 was the inflation adjusted price from 1980 so why did it take 45 years to get there? Is it possible for gold to go back down to 2k or even 1k?
850 down to 250 is about a 70% reduction. If we get that now it take us to about 1050.

I'm just throwing this out there for discussion. I don't know the answer to these questions. What held gold back for so long? I actually didn't know anything about gold back then and had no idea where to buy it. I wish I did, I would have loaded up at 250.
Click to expand...
The Eurodollar and Petrodollar markets soaked up the comparatively-low-quantity money creation for, basically 18 years. The economy was expanding - on hope, initially, but success fuels more success. Foreign businesses, those who would trade in American resources or goods, all needed dollars. AND the dollar was the cleanest dirty shirt in the wash - actually, with Morning-In-America, the dollar looked pretty clean.

So, while the money-printing party was just warming up, Main Street only saw the dollars that came from wages and investments. This prevented the price-rise spiral of inflation - for a time.

The dollar is no longer so beloved or so clean; and foreign banks and holders of dollars are looking to send them back. For Treasuries or for goods. While we've amped up the printing presses.

The increase in dollars now shows in the domestic money supply.
 
If gold was 850 in 1980 and just touched 3500 last week that is approximately 4x. Yet silver has gone from 50 to 33 in the same time period.

To martin Armstrongs point that gold and silver are not driven by inflation, lets go back to 1920. Just a random year when gold and silver were in circulation.
Inflation from 1920 until today is approximately 15x.

That would put a 20 dollar gold coin at 300 and a silver dollar at 15. Then just looking up random websites that discuss prices in 1920 versus today we can see prices are way out of whack versus what the reported inflation is. Part of that is the changes to the CPI calculations but many items are many multiples higher than they should be. Is this a concentration of money into 1 sector causing these distortions?
For example, a home should cost around 95k today, inflation adjusted from 1920. Yet it's more than 4 times that on average across the US. Gold is more than 11 times what it should be inflation adjusted and silver is only 2 times what it should be. If gold was 20 dollars in 1920 and it's 3300 today, that's 165x.
A house was 6300 if you use the 165x multiple, that puts it at over 1000000 in todays market. Again these are just national averages.

You can play around and calculate all the items you want but not a lot of it makes much sense.

Asked Grok what the US money supply was in 1920
The US money supply in 1920, as measured by M2, was approximately $35 billion
Click to expand...

in 2024?
The US money supply as measured by M2 in 2024 varied by month. Here are some key data points:
  • October 2024: $21,311.20 billion
  • November 2024: $21,447.60 billion
  • December 2024: $21,549.30 billion
Click to expand...

So if we take the December 2024 number and divide it by 35 billion we get a factor of 615. Obviously things haven't gone up by 615x. So is inflation driven by money supply or not?

So again, not sure what to make of all these numbers but I am sure some economist someplace will have an answer.
 
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