Linden Dollar Management

Gold standard didn't work for the USA, why would it work for SL?

I don't know whose right.. and rele I don't care..

But if the gold was flogged last week, who would know?

It's a good point, the who would know point. And I like crazy speculations, so I'm going to go through this one with you, it could be fun

Ok so let's flog the gold. That much gold on the international market at once might devalue gold itself, and I have no idea what that'd do to the pound, and the euro, and other currencies. I'm thinking global shockwaves though

But the big problem is that money in fort knox. It's like a big US problem. US dollars are not on the gold standard, which means the US don't hand over gold anymore, but they can't ever get rid of the gold, or it'd take the value right out of the dollar.

Supposing you could get all the gold out the back door, and sell it all without arousing suspicion or global repercussions, everything would tick over nicely for a time.

But it's a kind of unspoken truth that the gold is there, that the US currency does have value. Nobody can immediately cash out that value, but it's an always present non spoken truth.

So whip away the truth, and when the latest govt. report reveals the gold is gone, there would be widespread panick. Suddenly the rug would be whipped out from under the feet of all the nations who have US dollars as their core value, or companies that have assets in dollars. It'd be a massive world shockwave.

I think it's a bizarre scenario never likely to happen, but it could mean every US dollar note and coin would become worthless overnight.

I still don't trust them with it.. Lets melt it all down and add a purple dye and tell everyone NOT TO BUY PURPLE GOLD, if they couldn't use their own common sence.. THEN it would be safe and we could all sleep easy and take off these tin foil hats!!

Ok I just like to stir things..

I'm gonna give this one final shot. And see, the thing is, it's true wether you like it or not. So this is for your own good.

I know you can't trade in a dollar for gold anymore. That's called the gold standard, and it's not the case in America anymore.

But when you use the word dollar, that's an Alias. It's an alias for the hundreds of billions of dollars of gold held by the treasury. It's something so matter of fact it's (as I am finding) not even taught in schools anymore.

There never was and there never will be valuable paper. All paper money is an alias for something more valuable somewhere else, or it'd collapse as people soon realise they are just passing around actual paper with no extra value. That is what the gold reserve is.

As for America's assets like factories and stuff, it's like two separate entities. If you like a factory, you pay US dollars (GOLD) for it. And if you work hard you get paid US dollars (GOLD).

If the 8,000 tons of pure gold in the US treasury was nothing to do with currency, it'd be an expensive, time consuming waste of time to keep it around, and the govt would flog it for a fast fiver. What's the point in keeping gold (if not to upkeep a currency). You can't fashion a tank out of it. You can't make a house out of it.

Believe in your paper all you want, but I have linked to documents from the united states government no less, showing this is the basic way currency works, all over the world. If paper itself could be valuable, why the dollar and why not the Jsecurian rand?

Believe it if you want. But that is the state of play in the world we live in.

"what would happen if all the USA's gold reserve was 'misplaced'"

You are wrong, and you are wrong wether you like it or not. If all the gold was shelled out onto the market, the value of gold would fall, but not the value of the USD.

You are wrong, and you are wrong wether you like it or not. If all the gold was shelled out onto the market, the value of gold would fall, but not the value of the USD.

Why can't we all be friends.. Lets try and agree on something.. Aren't rabbits really fluffy.. unless you shave them.. I mean.. but thats not the point! they're fluffy, right?!?! *sees this thread going off-topic and carrys on before Jeska can move it*.. AND uhhh.. We all know how much rabbits care about the economy.. uhhhh.. we should back the L$ with rabbits!

Oh forget it.. You can carry on argueing..

So tell me this. Why does your government and my government and all governments keep this vast bundle of gold hanging around? Why bother? Isn't it a coincidence all our governments seem to have a lot of gold? Is it all to build alien space ships when "the time comes".

What could be going on? How curious...

You could just as easily have a reserve of those foam packaging chips that look like cheesy whatsits, but you'd need a damn big warehouse to store the same value in packaging chips as you hold in gold bars...


The gold is a reserve currency that has it's own value regardless of the value of the currency used by whomever owns the gold.

You could just as easily have a reserve of those foam packaging chips that look like cheesy whatsits, but you'd need a damn big warehouse to store the same value in packaging chips as you hold in gold bars...


The gold is a reserve currency that has it's own value regardless of the value of the currency used by whomever owns the gold.

Surely you can create more cheesy w.. I mean foam packing chips, but pretty hard to manufacture more gold..

So tell me this. Why does your government and my government and all governments keep this vast bundle of gold hanging around? Why bother? Isn't it a coincidence all our governments seem to have a lot of gold? Is it all to build alien space ships when "the time comes".

What could be going on? How curious...

Because, back when the leaders of those countries had some sense, they actually used the gold to back their currencies up and keep the government under control, that is, stop it from just printing more money to finance its expenses at will. Now, they have entirely abandoned the idea that they shouldn't inflate the currency. The gold is there because they don't know what to do with it. Countries have stopped buying gold a long time ago, they buy other currencies now. Gold doesn't keep the dollar up, the relative restraint of the Federal Reserve does. The swiss are even more controlled and if you look at a long term chart of the USD/CHF, you will see just how solid the dollar really is...not. If it was just a matter of reserves, the value of the two currencies would be about the same as the relative gold reserves and only change significantly when the reserves changed, but that is simply not the case.

Surely you can create more cheesy w.. I mean foam packing chips, but pretty hard to manufacture more gold..

Because, back when the leaders of those countries had some sense, they actually used the gold to back their currencies up and keep the government under control, that is, stop it from just printing more money to finance its expenses at will. Now, they have entirely abandoned the idea that they shouldn't inflate the currency. The gold is there because they don't know what to do with it. Countries have stopped buying gold a long time ago, they buy other currencies now. Gold doesn't keep the dollar up, the relative restraint of the Federal Reserve does. The swiss are even more controlled and if you look at a long term chart of the USD/CHF, you will see just how solid the dollar really is...not. If it was just a matter of reserves, the value of the two currencies would be about the same as the relative gold reserves and only change significantly when the reserves changed, but that is simply not the case.

Nah, I'm done. Let these guys believe a paper dollar has value just because it just does. That's maybe all the education some people have use for anyway. They can stay in middle america and believe what they want.

Since 1971 the US has had a Keynesian currency. It is a fact that "the paper dollar has value just because it does". Many people incorrectly believe that the gold in Fort Knox somehow backs the US dollar, but it doesn't. (Maybe too many people get their information from James Bond movies!)

The reason the US government holds gold is the same reason that nations throughout recorded history kept storehouses of gold: In case of international upheaval or war, normal economic activity is interrupted. If a nation must bribe or intimidate another nation for the purpose of forming alliances, or barter for weapons, etc., a bulky national treasury is essential.

Whether it seems logical or not, these are the facts:

1. The US dollar is not backed by anything, and has value solely because everyone agrees that it does.

2. The gold in Fort Knox is a “rainy day fund”.

Buster

Yes, but... I believe that kind of ties in with what I was saying. In that the US dollar has value because people say it has because you can't cash it out for gold at this time. But if there was a war and a country thought the US dollar wasn't worth much, the US would write off some notes and hand over some gold. So in essence, I think the base value of the dollar is gold, because I think the dollar would not last long with no gold.

EDIT: Or the USA could choose not to write off any notes and still hand over gold, but after the dust had settled I bet the dollars would be worth less per buck.

So tell me this. Why does your government and my government and all governments keep this vast bundle of gold hanging around? Why bother? Isn't it a coincidence all our governments seem to have a lot of gold? Is it all to build alien space ships when "the time comes".

What could be going on? How curious...

If the US government does not issue some gold to those nations who have dollar notes in times of war or crisis, would they not sue after a war? After all, dollars are issued by the united states. They are "money", which in it's purest sense is a promise to give value (though debate can rage as to just what value will be given).

If the USA ever held back all it's gold in times of crisis, that would instantly kill the dollar I think , and it might be some time before anyone trusted a currency published by the USA.