Why the gold standard?

There is really very little we can do to prevent bankers from making a profit, whatever we do. They own most everything. More important is educating people to not accept credit. As for now I would suggest buying food, since this is usually the first thing to good up in price.

Greenspan was a moral genius prior to selling out. He is now just another immoral genius.

Read his masterpiece.

http://www.constitution.org/mon/greenspan_gold.htm

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.
...
What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.

Gold and Silver are durable, divisible, recognizable, and finite. There is still plenty left in the ground but it takes enormous effort to find it, mine it and refine it, so that the supply (as a proportion of the economy in general) remains fairly stable, and therefore keeps a fairly uniform value.

Even without an ostensible metallic standard, a barrel of oil remains at about four or five ounces of silver, and a gallon of gasoline remains at about a quarter of an ounce.

Viva Agora!
Professor Bernardo de la Paz
www.citizenduquesne.org

I have thought about this one too. The only question in my mind is who controls issuance of the medium of exchange. I suppose it could be the government. I read colonial script gave way to prosperity and eventual Revolutionary war with England. The script was kept in proportion with the goods being exchanged. I get hazy on is how the government gets paid. Would it tax property for revenue? Is it good to have the power to print combined with the power to legislate and enforce? It seems like a deadly combination even without interest. Whatever the answer is it is not centrally controlled!

There's nothing magic about gold per se.

Paper currencies need something real behind them to prevent wild fluctuations in value. Money was "invented" to represent the value of work, property and goods. If the value fluctuates all the time then people won't trust it.

Also, if the value of money is not "tied down" or anchored then dishonest bankers and governments can manipulate the value to steal from others. In order to prevent this you need something scarce and durable to represent value.

Paper money is not scarce because you can print it at whim(same with credits in a computer). Without scarcity the value goes up and down everytime the supply goes up and down. Paper is certainly not durable.

Gold is not magic. It's just scarce and durable and provides a good base to prevent wild value fluctuations.

"dirt" standard like what we have now.

"He who exercises government by means of his virtue may be compared to the north polar star, which keeps its place and all the stars turn towards it." Confucius

So that your money that you work for retains its value. That's the whole point, really. It also has the added benefit of preventing bubbles that burst and keeping our young people out of senseless wars.

Fortune Favors the Bold
this would actually be legal right now, since it's not technically "currency." Just hypothetical credits whose value is set by market interactions in a community.

It doesn't matter WHO has the gold now. The reason so much of the gold is in the hands of central banks is because it is NOT the currency. As soon as gold becomes currency again, whoever has it must spend it. Government must spend the gold in order to pay its employees and contractors. Then the employees and contractors must spend it for food, clothes, cars, music, etc. In two or three quick steps, the gold is in general circulation and governments will only have as much gold as they can collect in taxes.

As it is now, the government has a money FAUCET they can turn on at will. Much better for them to have just a finite supply that they must spend into circulation.

I've been brushing up on "The Creature from Jekyll Island" lately and the book makes an excellent point. The best thing to base the currency on is something that has immutable value. Since there is nothing out there like that, history has shown that gold is the next best thing. It's not the perfect yardstick for backing money, but it is the best thing we know about. In the end, it doesn't matter what the measuring tool is (gold, platinum, sea shells, etc.) but the goal is to find something that has intrinsic value that changes as little as possible. Right now what determines the value of the dollar is how many the politicians can create to fulfill all their promises. Very dangerous system.

According to this site about 30,000 tonnes of the world’s gold [20-25% of above ground inventory] is held in central bank vaults.

http://www.galmarley.com/framesets/fs_commodity_essentials_f...

because it keeps weights and measures HONEST!

They no longer control that much gold. I'm not sure of exact figures but I believe its less than 1/2 if not close to 1/3. They have been selling their gold and pushing down the price of gold for years.

And it's not subject to the evil whims of central bankers.

Prior to the Revolution most commerce was done by barter and also by paper money printed by different states. All of it, however, was based on the production of goods and services created by the people. This is the same method Hitler used to pull Germany out of the Great Depression, which he did successfully within three years after his assumption of the German Chancellorship. After the Constitution was adopted, only gold and silver coin could be used as money in the United States. The United States, under Franklin Roosevelt, was declared bankrupt in 1933. The Fed has been acting as creditor of the UNITED STATES since 1933, and all money is based purely on debt and credit.