US Return To The Gold Standard?

Theres been talk of this for quite some time on and off. Nothing ever really seems to come of it other than speculation, dont really see this time being any different for now.

If anything it would make gold and silver spike to insane prices with the amount of money we have out there theres about a 0 percent chance we could buy enough gold to keep the price reasonable

The problem is though I'm pretty sure that would revalue our currency. If we said okay gold is now 200 american dollars and thats all well pay for it we just massively increased the buying power of the dollar. Thats good in someways, but it would put all of middle america out of work as we would officially be exporting nothing and just a 100 percent importer in the trade market as no one would pay the necessary price for our goods

If I calculated correctly, Fort Knox is reported to contain approximately $2.4 Trillion in gold at current prices.

Cotrrection: I think it is approximately $240 billion.

I believe that for your money to be backed by gold you would have to account for all the money you have printed. Not just the US supply but for every bill and coin that is around the world as well as in savings/bank accounts/cds/stocks ect.

Not sure if the debt would apply or not unless we tried to print money to pay it back

Lol could you imagine doing the math on the price per ounce with that included

Of course there is enough gold to pay off the US national debt. It's just a matter of price.

Of course, setting the price of gold is a double edged sword. What you are willing to pay for gold is balanced by what you are have to accept for it. If, for example, the US did go back on the gold standard and set the price to $10,000 per oz., we would have to both buy and sell gold at that price. If we guess wrong on this, we will be in DEEP financial doo in a real hurry. It would be very difficult to go on a gold standard unless all of our major trading partners were willing to do the same. Otherwise, we end up giving them gold while they give us fiat. Not a good deal, IMHO, and we would soon be loaded with fiat and have no gold left.

It is possible for a single nation to have 2 currencies, though, such as Cuba and South Africa have had in the past and may still have. One is for internal use and one is for international use. This seems overly complicated and may not necessarily be a good plan.

I am afraid that this gold standard talk is just that... talk. Perhaps it is something that is being used to woo the Ron Paul supporters out there? I put the talk about auditing the Fed and Ft. Knox in the same class.

Yes, I should have said at current prices and just counting all the gold mined in history

This is all hypothetical, so I'll play.

The federal reserve seems to be the real wild card (or roadblock depending on your point of view) for any restoration of a gold backed dollar. IF and when a return to a gold backed dollar happens, the Fed will absolutely will get a seat at that table and play a key role in it's creation and adoption. No surprise there.

So, given a limited amount of physical gold and a massive pile of fiat currency in circulation, in what form would a modern day return to a gold backed currency take shape?

It's hard to say, but a few things seem likely. Since the bankers and politicians aren't going to want to give up all their games, I suspect the ideal of a constitutionally mandated "fractionally gold backed dollar" will be the proposed solution where only 50% to 40% of the value of each dollar is backed by physical gold. In this scenario, the government(and the Fed) will be allowed to fabricate a large unbacked percentage of each dollar to facilitate transactions that by their nature would exist only in the digital domain, commercial and personal loans, and to provide a means for the Fed to continue to exert a certain degree of influence in the money supply. There might also be a clause in the legal framework that would allow a temporary increase in supply over and above the constitutionally mandated percentage in times of war and national emergency.

This solution is fraught with very real problems. Further more, if this system became untenable for any reason it would simply morph into yet another fiat currency and the problems would begin again. That said, I really think this is the idea we're most likely see proposed for a "return" to a gold backed currency.