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Gold/Mining/Energy : Gold Price Monitor
GDXJ 93.98+0.6%Nov 21 4:00 PM EST
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To: Enigma who wrote (53487)6/1/2000 5:25:00 PM
From: Hawkmoon  Read Replies (1) of 116764
 
Silver is far too plentiful and consumable, and light weight, and would impose no discipline. You might as well have nickel or copper.

Ahh... there lies the rub.. (ie: tying the rate of human economic growth and social progress to the capability of mankind to find and extract a shiny rare metal from 'ol mother earth).

Why not create serious discipline and peg currencies to diamonds?? Or how about Platinum or Palladium?? Why not peg currencies against the known global reserves of oil, the truest disciplinarian of excess economic growth? Peg our economic growth to our ability to discover and exploit additional energy reserves.

Apparently, it is obvious that you'll never understand the utter fallacy of the entire argument for reviving a gold standard.

But I suggest to you one thing... it ain't going to happened until you see an event that causes significant bank failures. And the American people will not tolerate anything that might rock their economic boat to the degree that a revived gold standard would.

In sum, you won't see a gold standard until the financial system, as we know it, fails (and that means AFTER Central Banks have sold substantial portions of their holdings into the market to control gold's price).

And YOU CERTAINLY WON'T SEE IT REVIVED AS A PROPHYLACTIC MEASURE to create some false semblance of stability. The resulting turmoil would be too much to bear, especially if the artificial peg rate that is developed for gold is far too low.

The confiscation of gold in 1933 only occurred after the damage had been and all traditional attempts to revive economic growth had been exhausted. The only way was to prime the economic pump and induce inflation by effectively devaluing the US dollar (thus forcing conservative money to be put to work as risk capital, hopefully to eventually grow in value). Pretty much the situation that Japan currently faces if they can't spur economic growth.

Regards,

Ron
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