Questions about tying dollars to gold and/or silverSubmitted by jshowell on Thu, 01/01/2009 - 23:01
1) How can the dollar have a set value when the spot price of precious metal changes daily?
2) Does the amount of dollars in circulation increase when the spot value increases or is the dollar a direct representation of the amount of a commodity ($1.00=1 ounce of silver)
3) If the amount of dollars in circulation increases when the spot value increases how do fractional increases in the value of silver add to the circulation? (how can you add 1/2 dollars or 0.66666 dollars to the system?)
4) If the dollar is a representative of a commodity how do merchants price goods if the price changes? Would all merchants require a commodities merchant even if there was a paper dollar backed by commodities?
5) If the dollar was tied to commodities how would anyone know what value the commodity was worth?
6) If the prices of commodities are still artificially manipulated by COMEX and paper markets how can the value of the dollar reflect the true value of the commodity it represents?