Since nixon's evaporation of the gold standard, the US currency has been backed by little more than confidence. Confidence in the people's lack of understanding of the monetary system that is. The federal reserve is not federal, it is privately owned. They can lend multiples of what exists in reserves, under fractional reserve banking. They control the amount of money in circulation, which comes in to existance through loans made to banks and governments. Since the money comes into existance through debt it has to be repaid, but with interest. Therefore the debt is larger than the money supply and inflation, along with defaults and bankruptcy, become permanent problems.
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Unfortunately, one possible reason why the U.S. moved away from the gold standard was that some countries were requesting to have their dollars redeemed.
ReplyDelete10:25 That is not a reason! REASON IS BECAUSE THEY CAN'T CORRUPT GOLD. 40:1 AND 100:1 LOAN SHARKS? CAN'T DO THAT WITH PM's!
ReplyDeletefractional...
ReplyDeletethe ETF's for PM's are like that now though. replaced mining stocks(along with HFT's bots being tied to some mining stocks killing any chances for them) but I guess large buyers are going directly to miners in production and securing their outputs directly, bypassing the comex and hopefully the fractional gold will fail.
The reason we abandonded the gold standard is exactly because some countries were insisting on being paid in gold, nost notably France. If we had not left the gold standard when we did France would have all our gold and we would still have had to leave the gold standard. There is not enough gold in the world to be used to back money anymore. perhaps when the worlds population was under a billion but certainly not today. You live in a dream world if you truely believe a gold backed money is possible.
ReplyDeleteGUE$$ I AM A DREAMER!
ReplyDelete651
ReplyDeletegold standard could be upheld
but
we suckered all the countrys to take fake money for thier wealth
hahahhahahah
they are idiots
you give me oil and you work like a slave for paper dollars
hahahahha suckas
what happens is the suckas wake up and say
daaaaaaaaaaaaaa
you got all the oil and the wealth and we have fake money
since 1972 gold was 35 dollars
with your retarded math even a idiot like you can figure what is it today?
gold is money!!!!!!!!!!!!!!!!!!!
when the ameREKAN WORKER WAKES UP ONE DAY AND IS A SLAVE
gold will be money again
that day is coming the day of reckoning
get your head out of your s and prepare know
buy gold hold it in your hand
ReplyDeletesome day you will be gratefull you did
otherwise be happy as the slave you are
sheep you are and sheep you will be