There’s Gold In Them Thar Bills

So this morning I awake to find a nicely folded USA Today sitting at the foot of my hotel door. Oh yeah! Reading material while eating breakfast!

I get down to the lobby to enjoy the free continental breakfast, set my computer down and lay the paper on the table and a co-worker says there’s an article in there about your gold. (Yeah I have made an impression on people talking about real money) “REALLY” I exclaimed. I almost didn’t even want to eat…just read!

Then reality hit in…this is the USA TODAY. I responded with “there’s probably the typical nonsense of “’there’s not enough gold in the world to back the dollar’” bull crap!”

YEP!

I will admit that the article is pretty well written but it did have this paragraph that details a lot of the main stream ignorance about a Gold Standard:

But returning to the gold standard also has myriad problems. On a practical level, there’s not enough gold in the world to return to a gold standard — and no one else in the world is on the gold standard. By tying the value of the dollar to gold, the government cedes control of monetary policy, making it unable to increase the money supply in times of economic crisis.

First “problem”, There’s not enough gold in the world to return to a gold standard. That’s just not true. Is there gold in the world? YES! Then there is enough to back our currency. Now I will concede that there is not enough gold in the world to maintain the current exchange rate of $1700 it might be $17,000 per Oz (or higher) BUT there is enough gold to back the dollar. Even if there were only 1 Oz of mined gold in the world it would be enough. The amount of a commodity has nothing to do with it’s ability to back a currency.

Second “problem”, No one else in the world is on a gold standard. This is true…SO? I don’t understand this logic: Every country in the world has worthless money that is manipulated by a private bank to finance the government’s spending so we shouldn’t have a sound monetary policy and restrict government spending by limiting the amount of currency in circulation? Yeah geez this makes a ton of sense. Instead let’s just hope that everyone continues to trust in our money and blindly use it for international business and buying oil. Let’s hope that every nation simply destroys their currency at a faster rate that we do.

Third “problem”, the government cedes control of monetary policy, making it unable to increase the money supply in times of economic crisis. And why is this a problem? Isn’t this the whole point? Let’s the get power of our currency away from central planning. Isn’t increasing money supply thereby destroying the value of the money part of the problem we face today? Isn’t this the solution and not a problem.