Since the Coinage Act of 1792 specifies that our money must contain precious metals I don't see anything wrong with the legislation being proposed by Rep. Pitts. It seems as though he is just insisting that the government follow its own rules.
Bonny Blue Flags are starting to fly across America once again!
"South Carolina Rep. Mike Pitts has introduced legislation that would mandate that gold and silver coins replace federal currency as legal tender in his state.
As the Palmetto Scoop first reported, Pitts, a Republican, introduced legislation this month banning "the unconstitutional substitution of Federal Reserve Notes for silver and gold coin" in South Carolina.
In an interview, Pitts told Hotsheet that he believes that "if the federal government continues to spend money at the rate it's spending money, and if it continues to print money at the rate it's printing money, our economic system is going to collapse."
CBS
"And be it further enacted, That there shall be from time to time struck and coined at the said mint, coins of gold, silver, and copper, of the following denominations, values and descriptions..."
Coinage Act of 1792
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Hmmmm....Tom, you're suggesting that we back up our claim to wealth with real wealth instead of promissary notes of supposed weal;th which we all know isn't really there.
ReplyDeleteHow dare you insist on such an ethical standard!
;-)
Honestly, I've got some serious reservations about the gold standard, too. But it beats the debt based system we live under now anyway you look at it.
ReplyDeleteSort of as a side topic; what if we don't have the gold to pull this off? What if Ft. Knox is empty? When Nixon completely decoupled our currency from gold and told the world to kiss off we, for all intents and purposes, defaulted on our debt. How did we do that and still manage to keep the dollar as the world reserve currency? I've wondered about this for years. We haven't had an audit of the gold supply in decades and no independent observer has been allowed in to see the gold since , I think, the '60's.
A lot of gold has been dumped on the markets over the last few decades to keep the price down and support the dollar. Did we pay back the world for our default by using our gold to support the dollar? What if our wealth really is "based on nothing"?
Sorry for the side trip to conspiracy island but this is something that I've never understood.
Tom,
ReplyDeleteYou asked, "What if we don't have the gold to pull this off?"
I do not think we do have 14 trillion dollars worth of gold to cover our national debt. I think, as you write, that "our wealth really is 'based on nothing.'"
BTW, what's wrong with a standard that includes other precious metals as well? For example, silver, platinum, uranium, thorium, etc. The last two have REAL wealth value in the amount of energy that they can supply via heavy metal fission. What gives other so-called precious metals their wealth value beyond their natural beauty and their uses in electronics is difficult to say. But maybe that's just the engineer in me speaking.
For example, gold makes a great covering for conductors on electronic circuit boards - doesn't corrode or errode with use. Silver is the best naturally occurring electrical conductor. But you can't fission either one.
I guess I simply don't have the financial acumen to understand these things.
I know we can't cover our debt. What I was wondering though is if we just crashed and went back to square one, do we even have enough gold in the treasury to issue coins again? And I agree that gold doesn't stand alone. The Coinage Act specified the metals that were to be used.
ReplyDeleteThe thing that concerns me about the gold standard is that gold is a finite resource which seems like it would establish some sort of ceiling on growth. Secondly, it is a finite resource that can be accumulated by individuals or groups, concentrating economic power in the hands of the few.
That's the advantage of the fractal reserve system. there is no real limit on wealth creation. My problem with the system as we have it today is that new money is created through debt which eventually leads to a debt burden so high that it's unsustainable. It is a Ponzi scheme. If the debt were to be created through labor now thats a different thing altogether. I'm thinking of a system not unlike that instituted by Henry I in England when he created the Tally Stick. He spent the money into existence instead of borrowing it in.
I too lack the acumen to speak authoritatively on this subject. I've just always had a weird interest in it. Of course, you don't have to be a rocket scientist to know what we're doing now is wrong.