Topic: Returning to gold standard? (Read 3163 times)

Whole those hashpower? And everyday is rising and difficulty of mining rising and again..When this will stop? And how this will stop, with bitcoin steady price or with sudden fall?
This is what scare me most when i think about bitcoin.
Gold don't have those problems. If mining (of gold) become more expensive price will follow as hundreds of years before.

Sounds like an explosive idea.

Totally agreeing whith you.

The difficulty should rise in a non linear way, so that too much waste of hashpower isn't processed!

I don't see any real practical usage for all those hashpower?
Only for securing transactions, this is such waste of power!
I mean this was intended to be using some idle state of online computers for some hash, not to involve whole industry..Am I right?
We finally have real face of bitcoin as everything else in capitalism.

Correct, China's PBOC is already working on their own proprietary blockchain-based currency.  The Fed has disseminated whitepapers for their own "Fedcoin" currency, as well.  Governments can tolerate a lot of dissent, but unregulated currencies are something they absolutely will not tolerate.

They accomplish two completely different goals.  Gold is a rare, malleable, corrosion proof metal that has been used as a store of value for as long as records have been kept by humans.  It's value is readily assessed based on its rarity and physical characteristics.  The only actual asset backing a particular cryptocurrency is the hardware which serves no other purpose but to complete totally arbitrary (and wasteful) hashing calculations.  Furthermore, that hashing power could be directed at any number of competing cryptocurrencies.  It's an infrastructure more than it is a currency.

The next real, game changing currency will be one based on energy, I believe.  When battery technology improves so that several MWh worth of energy can be stored in a small cell, you'll see people exchange those instead of traditional currencies.

To be fair, Bitcoin could be sent from anywhere there is a neckbeard running a full node on a laptop with an internet connection to anywhere there is a neckbeard running a full node on a laptop with an internet connection.

Which is to say, nearly nowhere

Yeah, the practicability.

Contrary to gold, btc can be send anywhere from anywhere.

You'll tell me same thing for fiat if they're based on gold that means gold (through fiat) can do it too.

Yeah but btc is based not on simple arbitrary assets as gold but on Hashing power. Which means technology development and power! Much better that an arbitrary noble metal no?

Bitcoin has potential and it's a great idea but have no chance to change anything in monetary system of the world.I'm afraid if governments wants, they gonna make payment system based on blockchain customized for their purposes.

First you must understand what is inflation and how was made. Only with gold standard we will have less inflation rates. because for creating more value to money you need more gold..more gold more mining.

With this system today we have enormous public debt!

You will see some brutal times when bubble of debt burst!

Oh the irony   If anything has a socially constructed value, it is a cryptocurrency.  In this respect, it is very much like fiat.  What is the actual value of an entry in this distributed ledger we call Bitcoin?  It's anyone's guess.

True, but the local captains of industry like Mr. arbitrage, the ones whoring out their signatures to dice sites for pocket change, are clearly the elite few, the Randian heroes, the 1% who'll profit.

What makes you think a return to a currency system based upon an asset, which is every bit as cornered by a few 'whales' as Bitcoin is, is good for humanity?

From what I can make out from the history books, a gold standard meant some brutally hard times for the masses when the economy went in to downturn, and picking up assets for pennies on the gold backed dollar for the very few.

Gold standard is best thing can happen to people if we don't think about bitcoin.
I think gold standard have greater chance to be revived, than bitcoin would be adopted by government..

Secret about gold is hidden behind wall of lies and disinformation.
Look at the story about UFOs 99% of all those news about are just scam, and people know that and don't believe in story about aliens..
Those rules from M. Twain time, cannot be applied today. In time of mass info revolution you can hide something only with massive disinformation!

...

I don't know much of the below, but I strongly suspect that these (below) points are true.  Further, that hardly anyone knows one way or the other, not any of you, not me.  All countries are secretive to one degree or other (for security reasons) about where their gold is, how it is transported, etc.  If you dig hard enough, you can verify what I write yourselves.

1)  Ft Knox probably DOES hold most of the ~8100 tonnes of US gold.  Most of it as 90% Au (coin melt).  This is our National Gold.  Smaller amounts are also held at the Denver, San Francisco and West Point mints.  A relatively small amount (400 tonnes or so) is held at the Federal Reserve Bank of New York (FRBNY), in the basement there in Manhattan.  

2)  The FRBNY mostly holds gold for other governments' central banks, although the FRBNY does hold the +/- 400 tonnes of US gold mentioned just above.  The FRBNY stores it for free.  The total is (was 2014 or so) some 7000 tonnes in storage.  Most of that gold at the FRBNY was sent to NYC after WWII when Europe was worried about a Soviet invasion (and losing their gold).  Germany has been taking some of it back, as far as I know, they made an Agreement with the FRBNY (possibly the USG as well) to take down their holdings to a lower level.  This Agreement is well-known, just dig!  Why the FRBNY?  Convenience for gold trading as well as safety from the ex-USSR.  Check out the FRBNY's brochure of their gold vault here: https://www.newyorkfed.org/aboutthefed/goldvault.html  They offer tours, but you have to book WAY in advance.  (I would like to go on the tour next time I am in NYC)

3)  Germany has not opened their gold holdings to public viewing, including the amounts they brought back recently from NYC (also some from Paris).  Their own experts are checking the bars.  (Koos Jansen is up on this, he is trying to get the bar numbers to see if they are EXACTLY what Germany sent over before, or other bars...).

In general, I would suggest that the Conspiracy Gold Theories are unlikely to accurately reflect reality.  "Yamashita's Gold" for example is complete hogwash, see Steve St Angelo's piece (Feb 8, 2016) here:

https://srsroccoreport.com/setting-the-record-straight-on-the-massive-gold-supply-conspiracy/

Wholesale gold holdings are kept quite secret for obvious reasons.

*   *   *

All of that said, it is possible, though highly unlikely, that the Ft Knox gold might be gone.  But to where?  How?  How would "they" move, say, 7000 tonnes in secret?  I used to work for a branch of .gov where we had to keep things SECRET.  And I will tell you that if 7000 tonnes of gold went "missing", LOTS of people would have known, and word would have gotten out.

"Three can keep a secret if two of them are dead."
-- Mark Twain


(Edited to correct mistakes)

People have good understanding over gold. This is the major reason why gold as a commodity is tied up with the amount of currency one can have in accordance to gold they can dig or possess.

The gold standard has been long gone lol.

Unless you get the current president of 2016 to re-sign the bill on gold stealgull act again, it`ll remain the same.

I dont think it`ll ever come back, since the 2016 debates were mainly about border control and immagrants as main discussion and not about our monetary system. If it was proposed and it did pass the house - I still think it wouldnt be signed off due to bankers paid lobbyist.

If you don't understand who rules the world, you must firs read this:  http://humansarefree.com/2014/10/exposing-shadow-forces-behind-nwo.html
Let's clear something, non existence of gold in Fortnox only proves theory US is heading to disaster. All that gold cannot vanish!?
Gold is taken from middle man and placed in Fortnox by force of law.
Through private federal reserve and banking system all that gold is stored on safe places..
all this proves only one theory GOLD WILL HAVE GREAT VALUE IN FUTURE!

Yep, great post, MatTheCat.
Germany won't ever get that gold, for one simply reason. They don't have enough military/economic power to force the US to do so.
there will be endless bla bla talks, and the Germans will finally give up on that.
I also doubt that that gold is still in the US vaults. Probably sold long time ago to China.

Which only goes to show how fallible the gold standard is. Remember kids, it's the goldsmith who invented fractional reserve banking

I just can't believe this can happen.
Gold is still no 1.
Who have such power to do this? Bitcoin? No this is just software.
One catastrophic news tomorrow and bitcoin will be 1/2 of it price.

Gold don't has those problems..

Great post and for the first part i had quite a good laugh.
Thanks for that.
Furthermore I doubt if the gold of Germany would still exist that it would ever get it back.
Reason why? Round about 50k american soldiers are deployed in Germany. The country is occupied.

Germany's attempts to repatriate it's gold from US Federal Reserve Vaults are even funnier.


Germany: Hey Fed, you have over 1500 tonnes of our gold, and we want some back.
Fed Reserve: Erm yeah...ok...here is 5 tonnes.
Germany: Eh wot, but we asked for 350 tonnes to be delivered before 2017!?
Fed Reserve: Erm yeah....but security procedures.
Germany: Ok, then we want to come and view our gold in your vaults.
Fed Reserve: Ermm......uhmm...you can't! Security Procedures.
Germany: WTF!? This is outrageous. We will send delegated officials to physically observe Germany's gold at the Federal Reserve vaults in New York!
Fed Reserve: Right Ok. They can come. They can look in one of the vaults. But they can't go in, and they can't touch any of the gold bars because of security procedures
Germany: WTF!? This is ridiculous.
Fed Reserve: Ok...urmm...ehmmm.....if they want to physically inspect the gold, then we will bring them a couple of sample bars, because of erm......
Germany: Because of 'Security Procedures'?
Fed Reserve: Erm...yeah! That's right. Security Procedures! That's good, we like that!

etc
etc
etc.


Beyond a shadow of a doubt, there are a whole bunch of individuals, institutions, and even governments in this world, who are not holding the volume of gold that they either believe, or state that they are holding. The exception to this rule might be China, who are holding a shit ton more gold than they state they are holding. When or if this fraud unravels, is another matter entirely though. Whilst nations like Germany may want it's gold repatriated, it would not be in their interests to acknowledge that the gold they have at the Fed Reserve is actually gone and/or doesn't exist and/or never did exist to begin with.

Gold cannot be manipulated as fiat money!
Fiat was created to get your gold as same as LTC was created to get yours BTCs

The current fiat monetary system is highly unstable and will inevitably collapse. There is no doubt. So yes, either a gold or silver standard will be again adopted

I sure everyone believes the US's claimed gold holdings too.

The last audit of Fort Knox was in 1953  and only 5% of the gold was permitted to be tested with no external experts allowed

The top 40 countries with the largest gold (2015) reserves are here:

https://en.wikipedia.org/wiki/Gold_reserve

Source: World Gold Council.

Note that some of those gold reserves may be double-counted or otherwise in error.  China, for example, is rumored to have much higher reserves (in secret) than is accounted for on this list.

Do you know any ranking of gold reserves by country?

Moving to a decentralized monetary system like Bitcoin would making moving to the gold standard irrelevant.  Gold is still relevant now as a safe haven against the dollar but if Bitcoin takes over gold will be a novelty.

I take it life didn't work out for you?
This, ofc, is all due to the fact that mankind abandoned the gold standard, nothing to do with you personally, correct?

I look on with glee to the day we are reduced to dust.

Heh, j/k.

Dissatisfied with the state of humankind, feeling like civilization is a bit subpar?

Gold is the only actual value that it can do a monetary reset.
thaht's why all countries want buy gold (or retrieve it from other country).

monetary reset is already plan.

As long as modern technological civilisation persists, we shall never again run about with a purse full of gold sovs, or silver shillings, and be exchanging them amongst ourselves for goods n services.

With that said, I could see a situation where gold may be used as a form of backing for a global currency, into which different nations 'buy a stake in', depending on what level of commodites they can pledge, with gold being a very natural choice.

China are currently the worlds biggest producer of gold and also the world's biggest importer of gold. The worlds #2 economic power is accumulating gold for a reason.

Whilst current economic pressures are deflationary, and the markets may be allowed to deflate and crash for a period of time, ultimately the only way that governments will be able to deal with their soveriegn debt and allow the system to keep functioning is to have great big devaluation event, whereby the the market is flooded with newly created currency (or the newly created currency that has already been created is unleashed from the dams of financial institutions balance sheets), which provides the liquidity for debt obligations to be met and for the system to keep on operating, albeit with a massive loss of value or purchasing power for those holding Fiat and/or government debt. During that brief period where the economy isn't quite moving and investing in equities isn't giving returns, but whilst the market also loses confidence in the value of government debt and fiat currency, is when Capital will all flow into commodities, and especially so, flow into gold.



Severe swings in the DOW/GOLD ratio occur on roughly 35-40 year cycles. We had our last peak at the height of the NASDAQ bubble in 2000 at around 43. Since then it corrected heavily down to around 6 in 2011, and has bounced back currently to around 16, but looks as though it is ripe to resume its trend back down towards single digits, or even sub single digits in the near future.

Looking more closely at the last cycle, DOW/GOLD peaked in 1966 at 28. Then during the Nixon Shock, as Richard Nixon suspended the gold window and ultimately abolished the Bretton Woods USD-GOLD global currency system, in order that the US government could deficit spend in order to prevent another deflationary economic collapse occurring during a Republican presidents watch, the DOW/GOLD crashed down to just 3 in 1976, but rallied back up to 9 in 1977, before resuming its trend and bottoming out at 1 in 1980. When Gold was worth around $800 per Oz, and a share of the Dow cost also around $800.

Looking at the current state of the DOW/GOLD chart, it looks to me, that the technicals are setting up to have the exact same thing happen once again, all whilst we have fundamental stories of China accumulating the yellow shiny metal stuff, hands over fist (and under reporting what they have)....

...erm so yeah....keep a fucking eye on gold! Gold seems to be rallying and breaking out now, but I suspect that equities are about to rally, and gold could either retest it's bottom or even go on and put in a new final bottom. But when gold moves up, as history has demonstrated, it will move relatively fast.

Why how noble of us that the only reason we refuse to adopt it is its outdatedness, and that its frugality, we would in fact be more than happy to impose. We surely are the greatest civilisation this earth has known.

https://www.youtube.com/watch?v=a7GJb0kufQI

This video is best explanation..

The Pharmacist

Hey, I basically AGREE with you, a Gold Standard (or even Silver) is not that good, see second post (#25) of mine above.  I think that "letting gold go", merely allowing it to its best role of Store of Value is the way to go.

A Gold Standard (or PM coins) is a less satisfactory solution, but better than the one we have now.  I quite agree: "We don't need money to be backed by metal."  Indeed, Bitcoin is a great example, touché!

fofoa.blogspot.com has it all, but it is a HUGE amount of information and logical argument laying out the case of a huge revaluation of gold coming....

But how to overcome all this?
Fiat is very inflations, gold coins can be manipulated with weight.
Fiat backed by gold is old fashion..
Bitcoin to take lead?
Maybe we all going to use co2 as payment model?

And how would this help anything?  We've already come off a precious metal standard and we've already been in a position where Gresham's Law has been violated.  It isn't going to happen.  We are moving so far away from a gold standard it's not even funny.  Look at the success of bitcoin, which is backed by nothing and need not be backed by anything.  We don't need money to be backed by metal.

Unless they made the value of gold coins very, very high, they would not circulate.  For example, were I running the monetary system of the USA, I might make a gold coin the size of the old (pre-1933) $10 gold piece (0.48 oz of actual gold, and some copper to harden the coin) worth, say, $1000 (vs. actual gold value of about $575 or so).

A silver coin the size of a US quarter I would have it worth some $15 perhaps.  Or make it a little smaller and stamp "$10" on it.

Even doing the above (fiat value WAY above metal value) might still not be enough to prevent hoarding of such coins ("Gresham's Law": bad money chases out the good).

So, IMO, best not to use gold as "money".  Silver might work better as a "Monetary Metal".

Maybe silver and gold coins can do better job than paper?
I also like this idea returning to gold coins..
All Precious metals can be involved.

...

I am in FOFOA's "Freegold" school of thought re the yellow metal.  Do not tie gold to currency, just let gold go.

Even under a gold standard (which WOULD be better than the current one), there was currency debasement.  Debasement is a standard practice among governments, very few currencies last more than 150 - 200 years.  The most successful money/currency that I know of was the Byzantine's, they kept their gold coins in circulation for hundreds of years because they did not devalue them (until the end).

Recall that gold's best and highest use is as a Store of Value.  Currency is best used as a Medium of Exchange and an Account of Value (price).  "Triffin's Dilemma" (wiki it!), and especially "FOFOA's Dilemma" shows what happens when a currency is used for all three functions, ESPECIALLY as a reserve currency.

The current system does not work well.  A Gold Standard would be better, but not even close to a cure-all.

Same story is with bitcoin..block will half and it will more and more difficult to mine it.
Fiat backed to gold will have more value over time, and you can expect natural growth in every field.
People will spend more and will be happy.
 Inflation will be extremely small.

And the gold standard has worked out so well, too. 

How much gold do you think there is in the ground and out of the ground.  If the population continues to rise, can the world sustain a gold standard?  I think not.

This system makes (prints) money when they need it!
By this way you have constant growth of total supply.
And money losing its value over time.
In some point we will have worthless inflated paper .

Yes but numbers are infinitly divisible so there for there is a limitless supply of bitcoin!



Because the current system has worked out so well lol.

Gold standard would be an anachronism, like those quaint Amish people with horses and buggies


Nothing to do with frugality.

We all are aware that not every gold can be dugged out from the whole world so it is not fixed the limit of the gold we can have. But i am thinking about bitcoin standard rather than gold standard as 21 million bitcoin is the maximum that can be dugged out. 

- He who has the gold makes the rules

China's turn next?

Reminds me of this

Makes me wonder why Russia and China are litterally buying gold by tonnes every month all the while the West sells it for fiat.

Gold backed Yuan in the not too distant future maybe?

Space mining. Please! We can barely get a man on the moon

Expect them to try and impose a global fiat currency before gold makes a comeback. Hint SDR's

The idea of a gold backed currency is great and in reality is it is much better than fiat because there is 'some restraint' on quantity of money. But it has its problems when trust is lost, everyone wants their gold and finds out its gone, then the system breaks down.

Best idea would be to forget backing it and use actual gold coins, although thats a bit barberous

However I do expect gold to be a good safe haven investment. don't risk it all on crypto

How do you suppose you get that precious gold to earth? Carrying weight to earth is going to be extremely difficult and costly. It may be easier to get it out of space than in to space, but any carrier needs to be sent into space costs about 25,000 per kg. Imagine a space pod to carry gold that needs to be sent into space and what it would cost, in addition to the mining equipment that needs to go there and the personnel. I don't think the gold mined from there would be worth the effort at the moment. Let alone any manned mission to planets or moons are very rare.

The gold supply should be very stable until those kind of problems are solved.

Buying gold is a great opportunity to do this and have some similarities in bitcoins and greater than governments money.

Cannot be never so. Especially cannot be true the second sentence according to which the amount of money supply must be determined by the amount of gold is dig out. The amount of money in circulation in a country have nothing to do with the amount of gold dig out. Cannot be depend the economic life and first of all, the development of a country from the dig out of the gold. And if them who dig out gold make continue strikes (understanding that they work determine everything) in order to have increases of salaries? Without their work no dig out of gold, no increase of money in circulation, amount of products without being sell (no money), hundred thousand people without salaries (again no money) and in this way can continue with everything. And why this? Because must be back at the gold age which will disappear the actual economic disaster. But let leave for a moment all the above and forgetting the enormous debt existent in several developed countries where is the big disastrous crisis? I don't see unemployment increase in the main developed countries, I see increase or in the worst of cases stagnation of GDP in the majority of those. Very, very few are those countries who have not such parameters. Maybe the big crisis exist only in the posts of this forum.

In that time, space mining makes gold not so rare anymore.

Going back to gold standards would mean the end of the inflation and the worthless fiat paper. Also, money from a country could be accepted in another pretty easily.

Yes this is completely unnecessary I think it's a plan to somehow keep the riches richer and poor poorer

Ah yes Gold. Thé resource with amazing intrinsic socially constructed value.

Adopting Gold would mean adopting monetary discipline, so for that reason alone it will never happen. We would sooner burn in the sulphurous pits of hell than live frugally.

A return to a gold standard is completely unnecessary.  Money doesn't need to be backed by anything, it never did, and it's not likely that we're going to return to that sort of archaic thinking.  I do like precious metals in spite of this and I think they're a good way to store value.

Gold is something i didn't follow at all until now.
THanks for the info above.
The next days i am going te learn and search a bit more about gold.
Looks interesting.

Buy Gold now.

Sell when 2 Oz of gold is worth 1 share of the Dow.

If Dow is 5000 and Gold is 2500, Sell your gold.

If Dow 10000 and gold is 5000, Sell your gold.


Don't delude yourself that the world is going to return to a gold backed currency, but do be sure that Gold will be a store of value long after Bitcoin has vapourised into thin air.

            Gold standard refers to a monetary system where the value of a currency is tied to the price of a specific amount of gold. The amount of money supply, then is determined by how much gold you can dig out.

What is your opinion do we have a time for this?
Will this help now when we have economic disaster?
Do you buying gold right now?

“Note that if all the gold in the world was melted down, it would fit in a 67 foot cube”