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Why Does Germany Not Trust The FED With Its Gold?

{Editor’s Note: This is the 5th installment of a series of articles attempting to address the 32 questions posed by Ron Paul in his recent farewell speech given in front of Congress. Check out the previous installment, “Why Are Americans Not Allowed To Use Gold and Silver As Legal Tender?”}

There has been rising sentiment on an international level that the World’s Reserve Currency, namely the U.S. Dollar, is no longer safe. To provide brief background on this, it was agreed upon that a “stable” currency would be used globally as a standard for international trading, which could be traded for its value in gold. Prior to 1944, this was the British Pound Sterling, but after the war the Dollar took over.

The United States’ fiscal policies, including money printing on unprecedented levels, paired with the decline of American dominance and the rise of the BRIC nations have spurred backlash against both the US Dollar as a reserve. This is turn has also shaken faith in the US as a trustworthy guardian of other nations’ physical gold reserves.

Why is Germany concerned enough to consider repatriating their gold held by the FED for her in New York? Is it that the trust in the U.S. and dollar supremacy beginning to wane?

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"Gold Exchange Standard" vs "Gold Standard"

Gold-Exchange Standard

[Editorial comments included; batteries sold separately.]

Gold-Exchange Standard: [Paper note buy paper note w/ printed promise to buy gold. Terms & conditions apply.] Monetary system under which a nation’s currency may [have a written promise to] be converted into bills of exchange drawn on a country whose currency is [likewise premised to by] convertible into gold at a stable [Think: Passing the buck is like riding a bucking bronco chasing a stagecoach.] rate of exchange. A nation on the gold-exchange standard is thus able to keep its currency at parity with [the quoted price of an option or future price of] gold without having [any gold] to maintain as large a gold reserve as is required under the [promise of the] gold standard.

The gold-exchange standard came into prominence after World War I because of an inadequate supply of gold for reserve purposes.

British Pond sterling [originally a weight & purity of silver] and the U.S. Dollar [originally a weight & purity of silver] have been the most widely recognized reserve currencies. The requirement of a fixed rate of exchange for the reserve currency has the effect of limiting the freedom of the reserve-currency country’s monetary policy to solve domestic economic problems. The use of gold reserves is now limited almost exclusively to the settlement of international transactions, on rare occasions.

[Rare occasions, indeed.]

Gold Exchange Standard: Passing the Gold Standard off as if either promissory note were made of said same gold.

See: "Passing the Buck"

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul


For my German heritage

Bump for my Jewish heritage

Good to see cultures can heal old wounds and unite against the FED

*Advancing the Ideas of Liberty Daily*

I wouldn't trust the Fed

I wouldn't trust the Fed to take out my trash, let alone hold my valuables. Should be interesting to watch as other nations follow suit and start asking questions about their gold.

*Advancing the Ideas of Liberty Daily*

Official Turns Federal Trash Into Taxpayer Treasure Nov. 1988.

Official Turns Federal Trash Into Taxpayer Treasure
November 25, 1988|Associated Press

TAUNTON, Massachusetts: In his pursuit of a bargain for taxpayers, Edward Aleixo has flown into the mountains of Virginia to retrieve an old pickup truck with bad tires and no rear lights, and he drove it home to Massachusetts.

He has wangled his way into government vaults and come out with an Oriental rug Henry A. Kissinger could not use, and procured shelving and two office cubicles discarded by the White House. Aleixo, a retired Air Force colonel, former narcotics agent and one-time school superintendent, makes big deals too. As director of the Massachusetts State Agency for Surplus Property, Aleixo is trying at the moment to get his hands on 12 used helicopters no longer wanted by the Army in Ft. Rucker, Ala., so he can give them to state police and a flight school in Boston.

Note the word "give." Relatively Small Price

Alexio insists that he does not sell a thing he brokers. But for a relatively small price that covers the cost of his operation, Aleixo obtains surplus federal property and passes it on to state and municipal governments, schools and nonprofit organizations such as nursing homes and halfway houses.

A relatively small price? How does $150 sound for a $1,840.56 medical centrifuge (like new)? Or $2,500 for a used $200,000 road grader?

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

The bright side

is that when all the vaults are emptied out (or confirmed to ALREADY be empty), they'll make for some sweet laser tag spots. ZZAAP!