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The Gold Standard. Help me out here.

I'm trying to really understand how to argue for the case of getting back to the gold standard. My problem is, I'm not really sure what the opposition's argument is.

Whenever I mention the gold standard, I usually hear "that's crazy" or some other non-argument attack... but on that rare occasion I'm talking with someone who is not quite as belligerent, the argument I hear is "there isn't enough gold for that to work in the modern era"...

Can someone explain to me how THIS line of thinking is not the true lunacy? I'm not wanting all of you to just agree with me that "yeah that neocon/liberal is a total puddin'-head" I really want to understand their argument so I can more effectively dismantle it...

How can we not have enough gold for a gold standard? Is there less gold now than there was during the thousands of years gold actually was used as currency? Even if that were the case, would it not simply mean that reduction of supply would mean a dollar/certificate would be redeemable for technically less gold, but it would be of just as much value, (since less gold on earth would therefore mean the gold we DO have is universally of more valuable?) What are the other argument's against the gold standard?

Any help here would be appreciated.

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Section II , A Crash Course On Money, Chapters 7-10 of G. Edward Griffin's "The Creature from Jekyll Island" for some good resources.

7. The Barbaric Metal
8. Fool's Gold
9. The Secret Science
10. The Mandrake Mechanism

Do not assume establishment party officials who say all the right things about conservative principles will do anything differently. This is the battle. Individual liberty demands personal responsibility. - Debra Medina

just advocate fredom

in competition for "currencies"... I am personally a fan of gold, but I want people to use what they want. An ENFORCED gold standard is not something I am interested in, nor is anything forced upon me by government.

I'd rather have a bottle in front o' me than a frontal lobotomy

A tragic comedy: Any measure (noun) should measure (verb).

The US Dollar is a coin of a certain weight & purity. A measure (noun) of silver. Valued around the world well over 2 centuries.

The gold & silver standards were promises to pay... to pay the bearer of a gold or silver certificate in the respective metal... gold or silver. The price edicted by the US government was denominated in Federal Reserve Notes. The tender paid varied widely around the world.

Printing Federal Reserve notes done with abandon. Caution to the wind. All can see a denomination. None know its measure. Its value is not weight, nor purity. The Federal Reserve Act, 1913 admits in line one: "an elastic currency."

A tragic comedy: An elastic currency? To what point do you rise?

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

To put it briefly

and simply: Supply and demand. IF there are twice as many people today than there was in the days of a half ayssed (brenton woods) gold standard, gold would be worth more. And the free market has already taken care of that. In 1971 gold was at $35/oz (some might say because of govt decree, but that's not the point.) Today, an ounce of gold is worth over $1600, 45 times more than it was in 1971, that's the free market in action.

“When a well-packaged web of lies has been sold gradually to the masses over generations, the truth will seem utterly preposterous and its speaker a raving lunatic.” – Dresden James

Here is your


The dollars in circulation now are too many. Picture it by first viewing this chart:


While viewing it, remember Nixon took us completely off the gold standard in 1971...

See all those TRILLIONS of dollars to the right? Okay now read this page:


Last, understand that if you could somehow gather every scrap of gold that man has ever mined into one place, you could only build about one-third of the Washington Monument.

However, their argument is absurd. It's to say we needed to go off the gold standard because there wasn't enough gold. That's not the case. The government wanted to break its shackles on spending. Period. If we had STAYED on the gold standard all Americans would be RICHER right now in terms of value per dollar. You could probably buy a gallon of gas for a little more than the cost in 1971. What was that? 50 cents? You wouldn't NEED as many dollars to buy things. All those trillions to the right are debt based inflation.

You shouldn't bother arguing for things you don't understand

Read a book on the subject instead, it'll give you a deeper understanding.

Arguing for something you don't understand is just stupid since you can't even be sure that you're right yourself.

Lawn-mover...I understand the gold standard.

I just don't fully understand what the opposition's argument against it is. And the last thing I want to do is pretend my opponent's argument is more asinine than the one they are actually putting forth; that's Krugman's style.

In their mind (I think)

a. they envision the actual exchange of gold for goods and don't realize that electronic transfers, or paper gold certificates could be used.

I tell them that I can go to mexico and use my debit card (which only has FRN's) and with one swipe can exchange it for pesos and pay a merchant. A PM backed card could work the same way, and I think schiff has one (although it's illegal for US citizens to have).

b. they thing there actually isn't enough Gold. doesn't really matter why. I think because they are told to think that and possibly back it up by increased population and a more "complicated" economy.

I just try to explain that the ONLY requirement for Gold to be a currency is that there are enough units to facilitate the needs for money in circulation. There is no evidence that there isn't enough gold for that.

Mostly though I don't say that gold is the answer. I just say that gold should be allowed to be used as a currency, on the same playing field as FRN, if people so desire.

SteveMT's picture

Here is the crux of their argument from their god.

In truth, the gold standard is already a barbarous relic. -John Maynard Keynes

Ask them: Why are central banks buying so of this barbarous relic that they are telling us NOT to purchase?

I Just Found This Rothbard Lecture


Rothbard: "Bipartisan: both parties acting in concert to put both of their hands in your pocket."

Focus on the principles

If you understand the difference between Enforced Monopoly (destroy competition) and Market Forces (no one is destroying competition), then the Gold Standard can make sense but there has to be an understanding of the concept of government.

Enforced Monopoly is bad, even if it is an enforced Gold Standard Monopoly.


Because there is no competition.

Competition, or Market Forces, forces the quality of products up (including money) and the costs of products down (including money).

What you will encounter when people argue against this or that is a point of view that destroys, or intends to destroy, competition.

Your point of view is competitive.

The person arguing wants to monopolize his own point of view.

Why is monopoly bad?

Your point of view may be true, his point of view may be false.

Which viewpoint wins according to the monopolist?

Which point of view wins if competition is not destroyed?

So a Gold Standard point of view could win out in a free market of money but there will be someone claiming that there has to be a monopoly of force, by this thing they call government, and they mean Monopoly Government, so your point of view will be crushed, snuffed out, because Monopoly always wins, just ask any Monopolist.

Me and my army, say the Monopolists, wins.

Not true.

In a Voluntary or Competitive Government there exists a Free Market of Governments too.

So now your viewpoint can continue to offer both a Voluntary or Free Market product called Money, and you offer a Gold Standard for that way of measuring money, AND, you offer that in a Voluntary or Free Market product called government, and you offer that Standard for that way of measuring government.

Already you may be thinking that I'm nuts, who knows, I don't, but if you have not figure this out yet, then it may be impossible for you to sell your Gold Standard to anyone - ever.

Monopoly wins, and if that is what you have in your brain, where you think that Monopoly of government force is necessary, then you are right, but it is only necessary if the goal is Monopoly, which is the same goal as the goal of destroying competition.

A Republic where there are competitive governments called States offered to the Market of tax payers, and each State joins, or does not join, and pays for, or does not pay for, a Federal Government, in that Voluntary Union, the force of all the Tax Payers voting with their feet (if all else fails to reign in government employees and force government employees to supply what the people want), where tax payers will fire (your fired) one State, and hire another State, at will, then there is in that way, that process, a market force, a sum total of all the free traders picking which State they want, a force of voters on foot, forcing the quality of the State up, and forcing the cost of the State down, in each case.

Now here is where the Gold Standard arrives on the scene.

After painting that voluntary picture of voluntary government and completely eliminating the Monopolists argument that involuntary taxes, and involuntary associations are necessary (for monopoly they are necessary but for competition they are not necessary and in fact involuntary associations eliminate competition), after destroying Monopoly with a competitive process that is higher in quality and lower in cost than Monopoly can ever pretend to be, after you do that, you usher in the concept of how a State pays Union Dues if a State wants to be a part of the Federated States.

Gold and Silver work as a very good way for a State to pay Union dues to pay the Employees who are hired to run the Federal part of the Voluntary Government.

Note: Oil may work as good as Gold, or Silver, in that competitive money used by State governments to pay the employees who are hired to run the Federal part of the voluntary Government.

Oil value may be depreciating, but it still fetches a sizable relative weight in Gold.

There you go.

In Liberty the use of a Gold Standard is a competitive method of payment between State and their employees who are hired to run the Federal Government. If a State can't make ends meet, being too despotic, having fewer tax payers because the tax payers are running away like runaway slaves, finding Liberty in better States that don't cost an arm and a leg, then that State can't afford to be in the voluntary Union AND that poor despotic State is probably a belligerent State that wastes a lot of power on failed aggressive wars for profit so it is better that no one finances it because if too many people finance a belligerent State within a Voluntary Union then that State may try to invade and take over other States by force (Civil War for example).

Too much information?

How about this:


"Mr. GEORGE MASON. Mr. Chairman, whether the Constitution be good or bad, the present clause clearly discovers that it is a national government, and no longer a Confederation. I mean that clause which gives the first hint of the general government laying direct taxes. The assumption of this power of laying direct taxes does, of itself, entirely change the confederation of the states into one consolidated government. This power, being at discretion, unconfined, and without any kind of control, must carry every thing before it. The very idea of converting what was formerly a confederation to a consolidated government, is totally subversive of every principle which has hitherto governed us. This power is calculated to annihilate totally the state governments. Will the people of this great community submit to be individually taxed by two different and distinct powers? Will they suffer themselves to be doubly harassed? These two concurrent powers cannot exist long together; the one will destroy the other: the general government being paramount to, and in every respect more powerful than the state governments, the latter must give way to the former. Is it to be supposed that one national government will suit so extensive a country, embracing so many climates, and containing inhabitants so very different in manners, habits, and customs? It is ascertained, by history, that there never was a government over a very extensive country without destroying the liberties of the people: history also, supported by the opinions of the best writers, shows us that monarchy may suit a large territory, and despotic governments ever so extensive a country, but that popular governments can only exist in small territories. Is there a single example, on the face of the earth, to support a contrary opinion? Where is there one exception to this general rule? Was there ever an instance of a general national government extending over so extensive a country, abounding in such a variety of climates, &c., where the people retained their liberty? I solemnly declare that no man is a greater friend to a firm union of the American states than I am; but, sir, if this great end can be obtained without hazarding the rights of the people, why should we recur to such dangerous principles? Requisitions have been often refused, sometimes from an impossibility of complying with them; often from that great variety of circumstances which retards the collection of moneys; and perhaps sometimes from a wilful design of procrastinating. But why shall we give up to the national government this power, so dangerous in its nature, and for which its members will not have sufficient information?"

Think like a Monopolist and you get what you pay for - every time.


The Gold Standard

This is the way I would see it...
An inventory of the total number of ounces of gold reserves at Ft Knox and all the Federal Reserve Banks would be taken. Then we would have to calculate the dollar figure for all of the currency, gov't bonds, govt notes and coin issued through out the world. The total ounces of gold held by the U.S. divided by the total "currency, et al" would give us the value stated in ounces of gold of one dollar. Then the govt would have to provide a new currency, notes and bonds to reflect that it is backed gold and that currency would be redeemable in gold at any US bank. The old currency would be turned in to any bank and new currency (et al) would be given.
Perhaps simplistic but I think it would work. Ron Paul advocates an alternative currency as competition with the federal reserve note. His idea - I am sure - is better.

Walter Block Explains It Well

He explains that it's not gold that we like, it's freedom. When people were free to choose their medium of exchange, they picked gold -- spontaneously and without central direction. This is because gold is valuable, divisible, durable, and so on.

So the reason we want gold as our medium of exchange is that the free market--over and over again--picks gold as money, not pieces of paper with numbers on them.

Rothbard: "Bipartisan: both parties acting in concert to put both of their hands in your pocket."

The World Is Still On A Gold Standard !

Scroll down this link to see who owns what:


Could the public use Gold/Silver as money ?




Only argument a gold standard

Only argument a gold standard is that it could be so easily manipulated by "the elites" because your average person can't even afford to get their own gold right now. Do you know who is buying gold, and a lot of it? George Soros. Get the picture?

As for the "not enough of it:"
Two things:
1. Before 1933 you could redeem $20 for an ounce of gold. Now it costs $1700 yet you cannot redeem your cash for gold at a bank. That should tell your buddy that overexpansion of the money supply is the problem itself, not the amount of gold in the world.
2. If there really is "not enough gold," it's still not a problem. While I don't support paper money, they could peg the dollar at 1 ozt gold for $10,000, 1 ozt silver for $1000, etc. That's why most here and Ron Paul himself advocate competing currencies, not necessarily a gold standard. There would be gold, silver, copper, other precious metals, bitcoins, paper, digits, and even plain old fashioned bartering for goods.

Simple Facts and Plain Arguments
A common sense take on politics and current events.


Understand that the price of

Understand that the price of gold only correlates with the money supply. It is not a 1:1 measure. Demand for gold has gone way up. Just twelve years ago gold was at ~300. Has the money supply gone up ~6x since then?

On your second point, we already have competing currencing for the most part. If you are in the US, the only thing you have to submit dollars for is your Federal taxes; state taxes if your state makes you. Everything else is up to you...though people tend to use the dollar because they like it.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a

Don't get trapped

This line of debate is a trap because someone can always trip you up with what ifs and nitpicking about the logistics of any particular system you might propose.

Stick to the principle. The advantage of a gold standard would be nothing more or less than that it would end a monopoly on money creation and thereby put restraints on corruption and mismanagement associated with our current money system.

The real answer to the money question is let the market work and see what emerges. I always say, I agree, gold may be impractical. Anything anyone can name might be impractical, but after many thousands of experiments the market will discover the option that is ideally suited to available technology and resources.

Ron Paul shifted to exactly this answer too, which is why these days he advocates competing currencies, and not just gold.