T Nation

Alan Greenspan: Bring Back the Gold Standard


#1

"We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard." -- Alan

$6300/oz for gold?

"Now our only question: why couldn't the maestro speak as clearly and coherently during his tenure which resulted in our current near-terminal financial state. And as a reminder, courtesy of Dylan Grice, if and when we do get a return to a gold standard there would be a need to reindex the monetary base to a real time equivalent price of gold, putting the price of the precious metal at about $6,300: "The US owns nearly 263m troy ounces of gold (the world's biggest holder) while the Fed's monetary base is $1.7 trillion. So the price of gold at which the US dollars would be fully gold-backed is currently around $6,300." And here you have people worried about day trading volatility..."

http://www.zerohedge.com/article/stunner-gold-standard-fully-supported-alan-greenspan

This won't happen until after THE GREAT COLLAPSE but it IS a good reason to 'nibble' at the metals.


#2

It is interesting that he knew that before he was head of the Fed, that he knows it now and that he tripled the money supply anyway.


#3

I read/heard that going back to a gold standard would be a bad move b/c at the present, gold is a commodity that could be easily manipulated b/c a small amount of people have (most of the) gold and that silver would be a better choice. I think it was from the 'Secret of Oz', check it out if you haven't.


I don't know the validity of this but I just thought I would post and see if anyone knew more.


#4

I would LOVE to ask him 20 questions and he HAD to tell the absolute truth. I honestly think he was given his mission by Ayn Rand and that his mission was to somehow redeem the country, by creating the biggest financial bubble (the real estate bubble) in human history.

Better to destroy now while we're powerful instead of 50 or 100 years, when China has eclipsed us.


#5

That's a little long to watch. Spark's Notes version? :slight_smile:


#6

This can probably explain it better than I can
http://www.secretofoz.com/index.php?option=com_content&view=article&id=63&Itemid=76


#7

Wouldn't doubt if he was trying to collapse the American financial statement for its injustices since 1913 onward.


#8

Gold is an easy market to corner, most precious metals are. It's worthless as a currency anyway because if you want to sell whatever gold you have, you have to sell it at a steep discount plus fees. It's still worth having a modest amount in your portfolio, but those people that are hording gold are in for a very rude awakening.

The gold standard is long gone, people need to deal with it.


#9

This has been my thought, bring about the collapse and watch market forces re-establish gold/silver as the currency.


#10

Fiat money systems never last. The temptation to get something for nothing is too powerful. Ever heard the phrase, 'Not worth a Continental'? The USA has been down this road before, both then and in colonial times.


#11

Uhhhhh wtf are you smoking? I'm assuming you are talking about the difference between the price bought/sold at and the spot price. The only time you have to give a decent discount is if you are trying to sell to a ripoff mint or a dealer. However, generally the more you are buying/selling generally the better discount as well. Now if you actually had a ton of a precious metal and needed to move it quickly then you'd be feeling a little pain. But if you are just selling a few ozs here and there it shouldn't be a big deal.

As of right now you can buy/sell an oz of gold for anywhere between 1.5% on up over spot. So that could be around $30 but when you look at it as a percentage it really isn't that big of a discount.

If you were at a grocery store and they were offering a 1.5% discount if you buy 10 cans of beans instead of just 1 can would you really be getting excited or would you probably just think it's retarded? Don't get me wrong you'd appreciate that discount if you were buying hundreds of cans of beans but if you just buying a weeks worth it really won't make a difference.


#12

I guess it depends on where you live. The closest gold dealer around me is located roughly about 100 miles from here. Otherwise the only places that will buy your gold are those Cash 4 Gold places, pawn shops, and that one jewelry store by the mall.

Try selling gold at a pawn shop? You're guaranteed to get ripped off. At the Jewelry store? Same thing. Cash 4 Gold? Please.......... The supermarket sure as hell isn't going to accept it.

My point is that it's not very convenient or practical as a currency. Maybe it was 200 years ago, but that's definitely not the case today.


#13

Ummm....computers.


#14

Skaz, you do realize the original banks were just warehouses for money, right? In today's computer age there is no need for the average person to hold physical gold since a warehouse could just electronically transfer it between accounts and between banks.

Furthermore, it does not matter the actual physical quantity of gold in the system. Prices are reflected in terms of supply and demand in both the money used for exchange and the good being purchased. The less money in the system the lower prices are. This would mean the act of saving (hording) on a very large scale could bring down prices.

If you want to own physical gold but don't want to store it yourself check out bullionvault.com. It has a very low rate and they even give you 1 gram free when you open an account with them. Keep in mind this is only one company and that there are others you could use.


#15

My brother argued before about how digitizing money would be a good idea.
I just shook my head when he said this.


#16

Just think about the possibilities!

No more tax evasion!

No more crime!

In a democratic society there really is no more need for financial privacy!


#17

As long as banks are free and there is open competition why is that a bad idea?


#18

Because then these assholes can monitor you 24/7?


#19

But if banking were free and we could flee from banks that allowed our spending to be monitored how would that be a problem? In an ideal situation -- which is what I thought were talking about -- digital banking is not an issue. Obviously, the way the system is now they can still monitor us as long as we are using fiat money.


#20

How about because if money is digitized there will be even less accountability for the creation of it. Imagine what a dedicated 'hacker' could probably do with this if they wanted.