There is an answer for the government to replace FRNs.
Submitted by iehuvihs on Fri, 08/21/2009 - 13:33Obama, 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.
http://en.wikipedia.org/wiki/Free_Silver
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.
grant
Why would the Obama administration choose
to pet the dollar to silver, since that would give back more power to the people and make it harder to float the government's debt/buying spree?
Now another president in 2012....
There would be no need to
There would be no need to mine ..Just raise the rates to accomodate what exists....Then the holders could get a windfall like the Bankers did.
Good people ,do Good deeds
and are no respecter of person
Of course the value for
Of course the value for which silver could be pegged to the dollar needs to be decided. I was just using today rate of exchange. The purpose is for silver to be recognized as money again. It hasn't since 1873, nor has gold since 1933. Sure there are silver coins still in circulation, but I referring to individual being able to exchange silver directly into coined money.
grant
Following this through...
to back the dollar on silver would mean physical posession therof. So the first issue is that you would have to purchase it. The second issue would be that there is not enough silver on the planet to back the dollars we have out, much less the amount we would have to print to purchase silver in the first place.
Those are just the physical issues I see.. much less the political ones.
~Live life to its fullest, with an open heart, open arms and most important... an open mind~
Creation of money returns to individuals.
To answer your question, I think you are confused about who needs to purchase silver. It would not be us, the people, but the government. Silver was demonetized in 1873, meaning that people could no longer pay their debt with silver, since the government was no longer accepting silver for purposes of making into coins. Only gold continued to be accepted by the government.
Up until 1873 if you had silver you could go down to a government office and have it exchanged for silver coins. (Of course there was a coining fee.)
After that date, the government limited the amount of silver coins in circulation.
This action returns the creation of money back to the population and out of the hands of the Fed. Although with current laws, the government can still control silver production by controling permits to mine for silver.
As for there being enough silver in circulation to back all the dollars we have out, that is not necessary. First of all currently there are actually very few FRNs in circulation. What the government does is recall FRNs by issuing Treasury notes. Only if all holders of U.S. debt were to run to exchange them for FRNs is there a shortage of FRNs. By pegging the dollar again to silver it restricts the government and the Fed from being able to print paper money. But for this to work, it is necessary that silver not be pegged to the price of gold. Since if for some reason people began to rush to exchange Treasury notes for silver, then gold could be used to buy back the silver coins. The more silver coins in circulation relative to gold, the greater the price of gold, since, eventhough it is coined as money, it is not pegged to the value of silver, which is pegged at a dollar value.
grant
Start buying silver eagles
Start buying silver eagles now (essentially silver dollars - one ounce of silver, face value one dollar) and start carrying them and spending them.
Whenever possible use the silver eagles and stop using FRNs. The FRNs will fall out of use.
Each of us can start now. What is stopping you?
My brain?
If I buy a ton of silver eagles and use them to pay for stuff, I run into two issues....if I find someone to take them at face value, then I'm losing 15/16ths of my purchase power. Now, that's stupid.
If I convert them TO FRN's so that I can get the money back on them that I spent, then I'm right back where I started, am I not? Which seems pretty stupid as well.
But feel free to get bunches of people going on this idea!
What I do is not use most of the system in the first place... I've no bank no house payment, no car payment, no car insurance payment...my yearly utility bills average out to nothing and we grow and shoot most of what we eat.
That's a much better way to leave a small economic footprint than using silver eagles to purchase stuff... :)
~Live life to its fullest, with an open heart, open arms and most important... an open mind~
Not everyone is as fortunate
Not everyone is as fortunate as you are, my hat goes off to your efforts.
I agree, whenever possible avoid using money and barter for goods or trade for services.
grant
Some arguements to free
Some arguements to free silver are that it would lead to inflation. But this is not true, since eventhough there is a stimulus to increase the amount of silver in the free silver system, and hence an increase in the number of minted dollars for circulation, it is compensated by consistent increases in our national population and for that matter the world population since it is likely that foreign nations such as China would continue to use U.S. currency if it were to have real value.
grant