Gord,
We know that minus a global disaster, we would not all be exchanging dollars for gold at the same time.
But then again, as I've understood it to be proported out here, is that gold creates discipline since your total money supply must be backed by gold.
Now the issue is who sets the standard for how much gold must be retained, and whether that ratio can be altered, or should be altered, from time to time. And since if you're like the Europeans, with a 15% required gold reserve, it is unlikely that you permit direct exchange of Euros for gold in that environment.
So you gain nothing except the realization that your currency is backed by a portion of shiny yellow metal.... (that should have its price set at a pre-arranged and set price that never moves. Not necessarily in the interest of the goldbugs.)
How would you all feel if the gold standard was suddenly initiated and the exchange price for gold was set at $285/ounce??
Wouldn't be much upside to the POG, now would there?
Regards,
Ron |
