Who Really Killed the Gold Standard?

a reply to: LaBTop

Good point, $8.5 trillion with a 25% cover would equal out to $34 trillion. I'm not savvy on how the gold cover worked, I think it was for currency in circulation and time deposits or M1 and M2. But note that the fed stopped producing statistics on M1 and M2 a long time ago.

a reply to: seasonal

Geez I don't know but I sure wouldn't be in stocks. Most stocks now have P/E's of above 30 the big names like Apple, Amazon and Netflix have P/E's greater than 100. It's crazy. Even Caterpillar has a P/E of 95, when their median value is 16.



I think commodities would be a lot better than equities. As they blew this most recent bubble stocks went crazy while commodities took a big dive. The cost to produce an ounce of gold is now around $1,200 and the price is just $1,330. So gold can't drop much below $1,200 before it will pop back up or miners will go out of business.

a reply to: SkeptiSchism


But their is nothing preventing a foreign government, buying gold or silver with dollars, at the suppressed price, this is what China has been doing for years. This is why all the PM's have gone East. I am assuming its the Western Governments that keep the price of PM's down to make their Fiat currencies look good. This has backfired as its allowed China to buy them at never to be repeated knock down prices.

originally posted by: anonentity
a reply to: SkeptiSchism


But their is nothing preventing a foreign government, buying gold or silver with dollars, at the suppressed price, this is what China has been doing for years. This is why all the PM's have gone East. I am assuming its the Western Governments that keep the price of PM's down to make their Fiat currencies look good. This has backfired as its allowed China to buy them at never to be repeated knock down prices.

What is a PM?

originally posted by: anonentity
a reply to: SkeptiSchism


But their is nothing preventing a foreign government, buying gold or silver with dollars, at the suppressed price, this is what China has been doing for years. This is why all the PM's have gone East. I am assuming its the Western Governments that keep the price of PM's down to make their Fiat currencies look good. This has backfired as its allowed China to buy them at never to be repeated knock down prices.

That's how reserve currencies die.

a reply to: seasonal

Precious metals. Check out palladium.

Here's a 5 year chart from KItco it's almost doubled in a year so it will probably have a correction soon. So I'd wait then buy the dip.

a reply to: SkeptiSchism

I will do some research on Palladium.

Do you prefer palladium over gold? I like silver do to it's cost and ease of use.

a reply to: seasonal


Precious metals, IE. Gold and Silver.

a reply to: seasonal


Palladium is used in Catalytic converters in cars, I wonder how long cars will be on the road with Lithium ion batteries getting bigger, E Bikes alone have taken off, especially mid drive where with power assist you can get a hundred mile range. Some places are offering free charging, if the economy tanks we will see them getting more popular.

So before 1971, I could have walked into a bank and trade it for gold?

Did anyone here ever trade their dollars for gold?

a reply to: anonentity

I had some Platinum and Palladium under my bed, also had Platinum ETF in 2007.

The price dumped because at that time people were buying less cars and the value of those metals went down.

Who would have ever guessed?

a reply to: nOraKat


Theoretically you could, if it was backed by gold, it was as "Good as Gold"

a reply to: SkeptiSchism

Happned way before Nixon, one can say Woodrow Wilson started it all by installing the Federal Reserve as the King of America.

a reply to: seasonal

I guess it depends on how much you have to invest. Personally I'm broke because I haven't worked for over 8 years, taking care of my mom she's 91.

But I own silver, junk silver coins a bag of dime and quarters. I bought them in 2008 as the subprime crisis was going down and I wanted to try and save what little money I had. I never spent them. I think they are good because people recognize silver, and they are already small enough to purchase things you need like food.

Everyone thinks the world will go to electronic currencies, they may be right but IMO electronic currency are ripe for abuse by both banks and governments since all your transactions will be recorded. Insurance companies will begin to rate your premiums off your purchases so if you're potentially diabetic and eat too much sugar they'll jack your rates that kind of thing so the black and grey markets will use silver or gold.

As for palladium or any precious metal I would own physical, in my house like a safe because the paper markets are complete fraud and it's so bad no now that when they finally break they'll just shut down the exchanges and you'll lose whatever you think you had.

originally posted by: nOraKat
So before 1971, I could have walked into a bank and trade it for gold?

Did anyone here ever trade their dollars for gold?

No read the first couple posts in the thread, FDR took the dollar off any physical backing in 1933, actually made it illegal to own gold coins. But people didn't turn in their coins they kept them in jars. FDR did it basically to revalue gold so he could increase the national debt.

Edit: So what happened was FDR took the dollar off gold backing in 1933 nationally, but internationally we still exchanged gold bullion for nations that owned treasury bonds that was part of the Bretton Woods system. Nixon ended that in 1971 because our trading partners were trying to redeem the bonds they held in gold bullion. Our gold reserves went from 20,000 tons to 8,500 tons before he closed the gold window.

Since then our gold reserves have never been audited 'officially'. Ron Paul has tried to get laws passed before to force treasury to do a complete audit of our gold reserves but no one ever co-signed the bills and they never made it floor for a vote.

a reply to: seasonal

Also if you buy junk silver (coins pre-1964) just remember that they contain 90% silver. So a Kennedy half dollar actually contains 0.45 ounces of silver not 0.5 ounces of silver.

Just something to keep in mind.

I thought these graphs were really interesting as well the first one shows the distribution of global wealth assets:



This next one shows the cost to mine, refine and deliver to the market a 1 ounce gold coin versus the cost to print a $100 bill.



That data was taken from the treasury department.



These images can be found here:

It cost the U.S. Treasury $134.14 per thousand of $100 bill’s printed. While the U.S. Treasury spent more money to produce the lower denomination bills versus their total face value, 71% of the $213 billion of Federal Reserves Notes printed in 2016 were $100 bills.

srsroccoreport.com...

So basically it costs US banks 13 cents to print a $100 bill, so if they paid cash it would cost them $1.43 to deliver a 1 ounce gold coin to market.

Also, Saudi Crude oil costs roughly $20 to drill, refine and deliver a barrel of oil to market that sells for $64 but that cost is probably a lot higher now. So, it costs US banks less than 3 cents to drill, refine and deliver a barrel of Saudi crude to market.

So this is the real reason why the Saudis are thinking of leaving the petro dollar system, they are getting screwed by US banks.

Who killed the gold standard? Reality killed the gold standard.

Gold standards have consistently failed as they are unable to adapt quickly enough to economic pressures.

originally posted by: SkeptiSchism
Here is another interesting factoid. The US treasury currently 'books' gold at $48 an ounce. That means treasury is intentionally understating the value of our gold reserves by about 2600%.

To put it to numbers, treasury says they own about 8,500 tons of gold or 258 million ounces.

258 million ounces x $48 /ounce = $12 billion
258 billion ounces x $1,335/ounce = $344 billion.

So treasury is intentionally understating our gold assets by $332 billion when our national debt is more than $20 trillion.

Some real geniuses at work here folks.

Book price isn't about current valuation.

The federal reserve provides an update valuation based on market price, they aren't understating anything.

originally posted by: ScepticScot
Who killed the gold standard? Reality killed the gold standard.

Gold standards have consistently failed as they are unable to adapt quickly enough to economic pressures.

No, socialism killed the gold standard. Socialism cannot pay for it's welfare promises so it must naked short a nation's money that is debt. Please read the thread, the reason LBJ removed the gold cover was to increase the national debt, the national debt is used to pay for wars and welfare.

If you want to criticize the thread please read through and provide valid points to counter-refute my arguments.