There is an answer for the government to replace FRNs.Submitted by iehuvihs on Fri, 08/21/2009 - 13:33
Obama, since that is the man we are stuck with at this point in time, could sign an executive order to have the dollar pegged to silver again. If he was to do so it would probably lead to the collapse of all other world currencies whose countries could not do likewise, (since they too are fiat in nature). This action would make the dollar a desirable commodity again and regain world trust. In the short term it would stimulate the silver mining industry, since it would mean mining companies (and individuals) would need to mine tons and tons of silver to replace the FRN. Free silver. It can be done.
As for pegging gold to the value of a dollar, there is no need to do so. Instead silver and gold could be allowed to trade freely in respect to one another. Gold could be minted in terms of weight and allowed to trade freely against silver dollars , it this case gold would be primarily used by individuals as a store of wealth if they so choose and not used for day to day market trading. Of course for this matter platinum and palladium or any commodity could also be used as a store of wealth.
The only question to be addressed would be the amount of silver in a minted silver dollar. Current market price puts silver at around $15 per ounce. So it is unlikely that a silver dollar could be minted with an ounce of silver. But congress can establish per the Constitution, weights and measures, and so a silver dollar, if so establish by congress could weigh 1/20 of an ounce of silver and subsequently silver pennies would weigh 1/2000 of an ounce of silver. One advantage would be to make carrying coined money much lighter than our ancestors of the past, as well as much more durable than paper money, which needs to be replaced when worn.
What I describe here is an open end system, meaning that as long as individuals or companies were willing to mine silver to meet their needs, there would be an expansion of money, generated by labor, rather than expansion of money generated by credit. In the long term this would meet the needs of the world market, producers, consumers and eliminate the need for and abuse by our current system of banking usury.
As for trading on the market place, a person carrying a ounce of silver would have the equivelent of $20 dollars, which does not over burden merchants; and with modern techology, there is bound to be creative way of carrying smaller coins or if preferred by individuals, creation of services in the transfering of savings by individuals at silver and gold storage warehouses.