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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (102887)	4/29/2009 2:00:15 PM
From: forceOfHabit	1 Recommendation Read Replies (1) \| Respond to of 110194

benwood, See... Sacred Gold would be exactly the same confidence game we have now. Of course. I have no particular desire to debate this topic (because its not helping me make any money), but I'm bored waiting for the Fed... But the real reason that a 'sacred gold' concept makes no sense is that they already HAVE that. What they have, in effect, is a SINGLE OUNCE of sacred gold worth trillions of dollars. They revalue this every year, adding a trillion or three to the value. All true. But neither does it make much sense to replace Weimar era Deutsche marks with a renamed currency with fewer zeros. Except that when people have lost faith in the old currency you try to restore their confidence by introducing a new currency. Along with the promise that this time, you really, really promise not to devalue it. The nice thing about a gold backed currency is that the promise not to devalue is more believable. The unfortunate thing is that the government controls only a smallish piece of the worlds gold supply, and hence would lose control of its money supply. Sacred gold solves both those problems at once. Is it a con(fidence) game? Of course. Is it a likely course of action? Hmm...no idea. But desperate times (I don't think we're quite there yet) call for desperate measures... habit P.S. As for the issue of how foreign governments would react to sacred gold, the elites in those countries face many of the same problems; why wouldn't they collude with their counterparts in the US on a solution that helps them at the expense of the rest of us?