In the Panic of 1837, it was fiat and speculation over public land sales, primarily related to canals. When Jackson enforced the "Species Circular Act" panic ensued. That was a clear example of what you're apparently concerned about - a case of fiat creation cut off by an enforcement of a precious metal discipline. Andy Jackson hated the banks and was harsh!
I suggest you reread your history about Jackson. Jackson wanted capital to go to decentralized banks, not the financiers on Wall St controlling a central banking authority.
He realized that the country was growing rapidly and expanding its borders. To take advantage of this opportunity he placed money in state based banks who were closer to the front lines of economic activity.
One of the prerequisites of "hard money" is that if there is great demand for it, but limited quantities available, interest rates soar as competition mounts to get access to that credit. Can you imagine 18% interest rates now on home and auto loans?? Not friggin' likely... there would be a political uproar from the people who own this country.
What is more important... your wealth, or the ability for the common citizen to have access to affordable, non-usurous, credit?? When you can muster the votes to defend your wealth, you'll win.
There is nothing gold provides that a SOLIDLY CREDIBLE Federal Reserve Chairman doesn't. Volcker and Greenspan have done fantastic jobs as Chairmen of the Fed. Not perfect, but certainly they provide a human face behind the flexible discipline of money supply.
Bob, I don't believe in the intrinsic value of gold. What I do believe in is the threat other's belief in the metal pose to my well-being and wealth. But facts are facts. There is no doubt that those who have held gold for the past decade would have been better off to sell it and hold dollars. So dollars have been a better storehouse of my wealth than gold has been since the time it topped out at $850/ounce (I wonder how those people who paid that amount feel about the intrinsic value of gold?)
So should enough of you be able to get together and force gold up in price enough to compete against the dollar as the global reserve currency, I will buy it.
I would be stupid not to since.... the trend is your friend.
But I won't be naieve about what I'm buying into and the limitations of its perceived "magic".
Let's leave it at that and give both of us a break. You believe what you believe and I disagree with you. I won't answer anymore groups of questions. They're just too long and unfocused (on both our parts).
Regards,
Ron
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