The Gold Standard

[Dr. L]

There are whispers out there from people wishing for the United States to return to the classic "Gold Standard" which is, if I am not mistaken, backing up the value of each dollar bill with gold, since gold maintains a high value. I've seen many commercials of people advising Americans to invest in gold coins, so that no matter how low the value of the dollar gets, the gold will maintain its good value. However, it is not a very liquid form of investment. Harder to turn into cash, and we have a limited amount of gold.


What do you all think?

[Edmaster]

We've been off the gold standard for a very long time. Without doing any research, I have my doubts as to whether such a move would even be feasible, as the amount of currency currently in circulation is probably much larger than the amount of gold we could reasonably get our hands on.

Money is only worth the value you give to it. Even if you told me that my dollar bill had a piece of gold attributed to it somewhere, that doesn't physically put a gold bar in my hand any more than giving me a current, non-gold-backed dollar bill would.

[Grunthos]

I'm very sure that there isn't enough gold to cover the current amount of US monetization.

In 2006, it was estimated that all the gold ever mined totaled 158,000 tonnes.

One tonne of gold equated to a value of US$30.27 million as of February 14, 2009 ($941.35/troy ounces).

The total value of all gold ever mined would be US$4.78 trillion at that price.

All the gold ever mined on the planet is not enough to cover the budget deficits Obama has currently commited us to.

[Dr. L]

Perhaps, then, we should use a shovel standard instead.

[Tonus]

We've been shoveling our economy into a ditch for a very long time now. The deficit spending of the current administration stands out only because of how large it will be and how fast it is accumulating (and in those two areas it is indeed remarkable, just not in a good way).

[Grunthos]

Too bad we can't go on a "bullshit" standard... we'd never run out of cash!

[Raziel]

You mean we aren't already? :O