They Redid the PENNY, too?!

[Jimaz]

Here's a video showing the manufacturing process for plastic currency in Australia.

[oladub]

There exists currently not enough gold in the world to back the expansion in money supply required to support a constantly expanding economy.

Which is why we went away from it in the first place.

If you want to create hyper-deflation, return to a gold or silver standard. Then watch the world economy collapse. Should be great fun. Make sure you have plenty of popcorn ready.

I am watching our economy collapse. The dollar is also losing its value.

The reason "we went away from it in the first place" is because 1) Roosevelt spent so much and 2) Johnson and Nixon spent so much on the Vietnam War and the Great Society.

The concept that there is not enough gold [[or silver) in the world is nonsense. Just put 1/19 an ounce of silver in every dollar of coins and let people choose if they want monopoly money or commodity based money. Pre-1965 coins contained 0.7234 troy ounces of silver per dollar and silver certificates could be exchanged for them "upon demand". It kept the government more honest" The Constitution states that only gold and silver coin is legal tender in payment of debt. Our Founding Fathers were fully aware of the destruction that paper money breeds. The Revolutionary War and the Continental paper money used to finance it had left deep impressions. Inflation rates of over 1200% caused hardships not easily forgotten.

Runaway inflation turned into hyper-inflation that destroyed the currency. This is where the phrase: “not worth a Continental” comes from. The authors of the Constitution wanted nothing to do with paper money. Bills of credit were forbidden. Only gold and silver coin was allowed to circulate as legal tender." http://www.honestmoneyreport.com/



Retroit, I agree with your first three paragraphs. However, the diluted value of dollars means that whomever has their hands on gold will be able to retain value. If a product costs $1 in 1964, it could still be purchased for $1 of 1964 silver coins while it costs $18 in todays fiat money. Silver divides easily. Gold, as you say, is a bit cumbersome. One would need about 16 one ounce gold coins in one's pocket to purchase a new car outright. For smaller items, pre-1965 silver, nickel, and copper coins make more sense. The dollar is retreating and its value hinges on the good will of China, Japan, and the Saudis.

I wish I had been smart enough to buy some gold but, better yet, I would like a dollar grounded in such commodities to reduce the government's ability to cheat with a hidden inflation tax.

Peter Schiff explains part one of three

[Retroit]

I will agree that a dollar backed by gold or silver or any other precious commodity would be better than fiat money. But even fiat money could retain its value if the government was able to restrain their spending. In other words, it's not what precious commodity that dollars are backed with that gives them value, it is the maintenance of a small quantity of dollars that gives them value.

[ccbatson]

Correct Retroit...however, since the government is unwilling to restrain spending, a standard would remove that power from corrupt liberals.

[Retroit]

True, it would. But that's assuming that our government wouldn't find some clever way to circumvent the restriction of a gold standard. They could simply adjust the dollar to gold exchange rate. This year, you could exchange 1000 dollars for an ounce of gold. Next year, you will be required to cough up 1100 dollars for an ounce. Or they could pay off the federal debt using gold, thus reducing the gold supply, raising the exchange rate, and devaluing the dollar.

Ultimately, a responsible government is what is needed.

[ccbatson]

Gold prices would be market based, as they are now.

[oladub]

True, it would. But that's assuming that our government wouldn't find some clever way to circumvent the restriction of a gold standard. They could simply adjust the dollar to gold exchange rate. This year, you could exchange 1000 dollars for an ounce of gold. Next year, you will be required to cough up 1100 dollars for an ounce. Or they could pay off the federal debt using gold, thus reducing the gold supply, raising the exchange rate, and devaluing the dollar.

Ultimately, a responsible government is what is needed.

We had silver coins through 1964 and silver certificates redeemable in silver coins to go with the coins. Simple system. After 1964, the silver content of coins was reduced. Nixon broke the last link between the dollar and gold. You are correct. The government did debase money until it was backed with nothing and made of cheap stuff. However, to the extent that coins are made from valuable commodities, those coins cannot be become worth less than the melt price even in a foreign country or if someone dug them up in the future.


Poor little red line. It won't buy as much gasoline and other imported things anymore.

[Blarf]

Who gives a shit what pennies look like? I hate pennies. They are annoying.