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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Maurice Winn who wrote (69782)	6/25/2008 4:04:01 PM
From: RJA_	Read Replies (1) of 74559

>>There simply isn't enough gold to run a 6 billion person economic system using that as the means of exchange [which necessarily involves some store of value as well]. Sure there is. It all depends on the price, as it is a fungible divisible element. It would take some strong governments to do it, say China allied with OPEC (Iran is ready now) & Russia. Frankly, I think the Germans & Northern Europeans and the Aussies would be happy to do it... the PIGS, thats another matter. Redefine money. Now, will it be done? Things would have to get pretty bad in fiat currency land first. There almost has to be no alternative. But then, we have seen that kind of thing in the past... just never world wide. And it would not have to be a strict gold exchange standard, just an approximation would probably do it... kind of back to the pre 1971 methodology in the US... where international debts were settled in gold, but we did not have a true gold exchange standard. That would not be my preference. The world has essentially been taxed by the US to pay for its empire, military, and social programs by accepting fiat currency with value de jure. China used it to build their manufacturing base, the Saudis for defense... but is it really good for most of the world to pay that tax? It has been good for the US standard of living... but why is it in the interest of most of the worlds governments and peoples for this to continue? In fact, my contention is it will not continue because it can not, and we are currently seeing the beginnings of a break up of the fiat money system... The system that brought on all the easy lending and speculation which has collapsed/is collapsing. Hows that for a thesis <grin> ?

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