To the Ron Paul haters

[beowulfgreen]

The US govmt already acquired most of the gold in our country by requiring(under penalty of imprisonment) that all US citizens turn all gold coin and bullion into the federal reserve, at very minimal compensation i might ad. but that's beside the point, the solution to change back to a gold standard, would be to lower the dollar amount in circulation causing deflation. sure there would be less money around, but due to deflation, the value of the individual dollar would go up and prices would go down. And since we as americans still count and price to the last red cent i don't think people would have a problem paying 25 cents for a double cheeseburger at mcdonalds instead of a dollar(granted that future 25 cents is equal in relative value to the current dollar) i mainly brought that up as a convenience factor for counting out a little change(we do it already anyway) You may be wondering how the value of the individual dollar would increase while prices decrease. we'll use a mathematical formula on a small scale for this. seeing as there is a finite amount of gold on the planet and an infinite amount of currency(any country can always print more money) for a gold standard you divide the amount of gold owned by the country's economy regulating institution(federal reserve, national bank, etc) by the total dollar amount in circulation. for this example, lets say the we only have 100 ounces of gold and 1000 dollars, each dollar is worth .10 ounce of gold. Now lets burn half the money(take it out of circulation) we still have 100ounces of gold, but only 500 dollars, the value of each dollar is now .50 ounce of gold. thus each dollar has now increased in its individual value. Now to answer why prices would drop, to do this we need to go all the down to the original manufacturer/purveyor of raw materials for any product in any industry. The original purveyor needs to sell their raw materials to the next person in the chain to refine/manufacture to the next stage of production. Since there are fewer dollars around(but with greater value on the gold standard) the next person in the chain(refiner/manufacturer) must purchase the raw materials for a lower dollar amount. the original purveyor must make a decision, sell for the lower dollar amount(keep in mind each dollar now has greater individual dollar) or not sell at all and go out of business. so he sells for the lower dollar amount. the third person up the chain needs to buy the refined/manufactured materials or product from the second person in the chain to either sell( if product is finished) or further refine or manufacture( if product is not at finished state). Again, with fewer dollars in circulation(but with greater individual value), the third person must purchase product at a lower dollar amount. And again, the person below them in the chain must either sell for the lower dollar amount or go out of business. they sell for the lower dollaramount. and so up the chain it goes until it reaches the consumer resulting in a lower price. You can apply this to ANY industry(energy, oil, agriculture,food service, etc).

Gold, even at it lowest price, is still quite valuable, and usually tends not to have dramatic value decreases. the price of Gold, being a finite resource, is primarily driven by the market. The market being made up of individuals (in this case usually rather wealthy individuals). The individuals are usually willing to pay a handsome price for gold. the market price (loosely the average price of all sales of that product at that time) will normally stay high, as the individuals purchasing gold generally will pay a high price for gold, as it is valued quite highly.

Now of course this wouldn't be an overnight deal, nothing with massive economies is(except sever depressions), I think we would see a much quicker improvement in our economy than sticking with the current fiat system.

[beowulfgreen]

Like I said, I don't know anything about the constitutional status of the Federal reserve. I'm not concerned about that. I just think that there is no way to convert to a commodity-backed currency given the amount of wealth in the modern economy. People have faith in the currency. They know it can be traded for things of value, including gold, if they want gold. As long as the currency is regulated in a way that prices remain relatively stable --- no runaway inflation, no deflation, then the faith remians, and the currency reallly does have value. There's no need to say "this currency is guaranteed to be tradeable for a set amount of gold." There already is a gold standard --- it's called "gold."

One may be able to purchase gold (usually for much more than it is actually worth in dollar value). but you can not simply trade your money in for gold anymore, before we had a fiat currency you could take your dollars to any federal bank(meaning one contracted by the federal government to handle minting of US currency, the same way the us gvmt has a contract with the federal reserve to print money) and exchange them for actual gold coin. it meant that the paper money you had in your pocket was really a representation of gold, and anyone, anywhere in the world will trade any product for gold. Thus, you would be able to use gold backed US currency to trade for any product as it would actually represent the gold that backed it(the person you traded your dollars to could in turn trade those dollars for gold). why not just use gold as currency you might ask? well its much harder, and much more conspicouos, lugging around a few hundred pounds of gold as opposed to a few ounces of cotton based paper.

many people feel commodity backed currency is too volatile, and think thats what led up to the great depression. the great depression was intentionally created by a few wealthy bankers(the same ones who also intentionally triggered another massive depression two decades before so they could consolidate their banking interests and set up the federal reserve), so that THEY could acquire the majority of gold in the US, by switching to a fiat currency, thus convincing the general populace that gold was of little worth and to turn all gold coin and bullion over to the federal reserve(and for those who werent convinced faced imprisonment if the did not turn their gold over) without realizing the value of gold was still just as valuable on the international market. "Why would they want to acquire all that gold?" you may ask. because they knew that gold will ALWAYS have great value on the international market, even when individual economies(no matter how large) fail.

[dragonrider]

I don't think it matters what you might do to deflate or otherwise change the value of the currency. It does not change the fact that there still isn't enough gold to equal the value of the economy and the cash in it. I think there are about 820 billion American dollars in circulation. If gold is about $820 an ounce (for convenience, but not that far off I think), then to back all the dollars at market rates the US Treasury woulld need a billion ounces, about 31,250 tons. I bet you we don't have that much. Maybe not all the major banks and reserves in the world have that much --- I don't really know. But I think that if the US were to try to acquire that much gold there would be some serious distortions of value in the price of gold, and it would become nearly impossible to acquire that much gold at any price.

[GoldenBoy812]

Instituting a gold based currency derived off its worth in dollars makes no sense.

In theory, 1 oz of gold is enough. A dollar would be worth a certain fraction of that oz, such as 1/10000000 of an oz = 1 us dollar.

Then the currency could free float vs other commodities.

[dragonrider]

Instituting a gold based currency derived off its worth in dollars makes no sense.

In theory, 1 oz of gold is enough. A dollar would be worth a certain fraction of that oz, such as 1/10000000 of an oz = 1 us dollar.

Then the currency could free float vs other commodities.

Yeah, you could. But from the point of view of people who want the "Gold Standard" (not me, other people!) what is the value of doing that? Right now a dollar is worth maybe approximately 1/1,000 an ounce, so guarranteeing it at 1/10,000,000 does what? Guarantees the currency will not drop to less than 1/10,000 its current value? It puts a floor on the value, but the floor is way, way down there. I don't think that does much to reassure the gold standard people against hyper-inflation --- the governemnt could still print 10,000 times as much currency as there is now and still be able to back it at that rate.

I don't think we need a gold standard, but those who are in favor of it think of it as a way to prevent inflation. I always understood that to mean that the dollar would be backed by gold at close to market rates, not some miniscule fraction of market rates.

[Nailhead]

I'm not sure if this part is true for the large majority of people. Most people I think are actually more in the middle and don't care for the extreme ideological positions staked out by the parties.

Just to clarify, I was talking about the voters, who I think in general represent an extreme in their party, or are just incredibly stupid and were lured into voting. The main problem with American politics is that American's in general don't care who is running the country, or what country we are bombing. As long as we can fill our gas tanks up before a trip to the river and get drunk as hell, we really don't care what else is going on in the world. Then, of course, we keep telling ourselves we are a peaceful and caring nation, and as long as we tell ourselves this lie over and over, we will continue to believe that load of crap.

[HerbalConfusion]

Just so you ron paul supporters know arguing on here/proving your point wont get him elected. We are not the people you need to convince (well maybe convince to help you).

I voted for Obama for the nomination. ron paul has 0 chance of beating MCcain and i want my vote to count.

[HerbalConfusion]

ZOMG 8182KSKUSH your so right!!! lets put some more smiley faces :jointsmile::thumbsup::hippy::wtf::stoned:

zomg im ignorant and i prove it by using as many unintelligent insults as possible! If i disagree with your own personal choice/vote to Ron paul ill simply call you a fucking idiot and give bs reasons why o and then more smiley faces :thumbsup:

Its so true. When he is the blind one to think ron paul has a chance to win or he ever did. Maybe he couldve won a nomination if he ran independent but he is stubborn.