Australian Politics Forum - backing a currency with gold

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #15 - Mar 22^nd, 2024 at 10:38am

thegreatdivide wrote on Mar 22^nd, 2024 at 10:32am:

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

"Bad news" about the US economy?

Should have included the third reason - a fall in the value of the US dollar.

Back to top

IP Logged

thegreatdivide

Gold Member

Offline

Australian Politics<br
/>

Posts: 15443
Gender: male

Re: backing a currency with gold
Reply #16 - Mar 22^nd, 2024 at 12:34pm

MeisterEckhart wrote on Mar 22^nd, 2024 at 10:38am:

thegreatdivide wrote on Mar 22^nd, 2024 at 10:32am:

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

"Bad news" about the US economy?

Should have included the third reason - a fall in the value of the US dollar.

...which gets us back to the insanity of mainstream economics: interest rates set by the central bank likely to fall, consequent to an improving economy, so the 'value' of the currency ( to exchange traders) decreases because people are worried by increasing govt. debt (which is another mainstream myth, ie the govt's debt seen as household debt which 'must be repaid').

Back to top

IP Logged

freediver

Gold Member

Offline

www.ozpolitic.com

Posts: 53254
At my desk.

Re: backing a currency with gold
Reply #17 - Mar 22^nd, 2024 at 1:29pm

thegreatdivide wrote on Mar 22^nd, 2024 at 12:34pm:

MeisterEckhart wrote on Mar 22^nd, 2024 at 10:38am:

thegreatdivide wrote on Mar 22^nd, 2024 at 10:32am:

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

"Bad news" about the US economy?

Should have included the third reason - a fall in the value of the US dollar.

...which gets us back to the insanity of mainstream economics: interest rates set by the central bank likely to fall, consequent to an improving economy, so the 'value' of the currency ( to exchange traders) decreases because people are worried by increasing govt. debt (which is another mainstream myth, ie the govt's debt seen as household debt which 'must be repaid').

So what?

Back to top

People who can't distinguish between etymology and entomology bug me in ways I cannot put into words.

IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #18 - Mar 22^nd, 2024 at 5:28pm

thegreatdivide wrote on Mar 22^nd, 2024 at 12:34pm:

MeisterEckhart wrote on Mar 22^nd, 2024 at 10:38am:

thegreatdivide wrote on Mar 22^nd, 2024 at 10:32am:

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

"Bad news" about the US economy?

Should have included the third reason - a fall in the value of the US dollar.

...which gets us back to the insanity of mainstream economics: interest rates set by the central bank likely to fall, consequent to an improving economy, so the 'value' of the currency ( to exchange traders) decreases because people are worried by increasing govt. debt (which is another mainstream myth, ie the govt's debt seen as household debt which 'must be repaid').

More like, with interest rates dropping investors are not getting enough bang for their buck, so they turn to gold.

Back to top

IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #19 - Mar 22^nd, 2024 at 5:31pm

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

Well, the spot price has eased (still the COMEX to go NY time).

Gold has at least posted its next aim for support - USD2200.

Next week will show whether there's enough support to get back there... if it doesn't happen by Friday 6 PM NY time.

Back to top

IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #20 - Mar 23^rd, 2024 at 7:29am

So what's causing the upward spike in the spot gold price?

Analysts report that they're not sure.

There has been no recent serious world event.

There has been no recent downturn in the US economy.

There is a lot of speculation that US interest rates will drop in June to between 5% to 5.25% which would account for some upward pressure on gold.

Their best guess is that investors are speculating on crypto and storing their profits in gold.

Back to top

IP Logged

thegreatdivide

Gold Member

Offline

Australian Politics<br
/>

Posts: 15443
Gender: male

Re: backing a currency with gold
Reply #21 - Mar 26^th, 2024 at 1:12pm

freediver wrote on Mar 22^nd, 2024 at 1:29pm:

thegreatdivide wrote on Mar 22^nd, 2024 at 12:34pm:

MeisterEckhart wrote on Mar 22^nd, 2024 at 10:38am:

thegreatdivide wrote on Mar 22^nd, 2024 at 10:32am:

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

"Bad news" about the US economy?

Should have included the third reason - a fall in the value of the US dollar.

...which gets us back to the insanity of mainstream economics: interest rates set by the central bank likely to fall, consequent to an improving economy, so the 'value' of the currency ( to exchange traders) decreases because people are worried by increasing govt. debt (which is another mainstream myth, ie the govt's debt seen as household debt which 'must be repaid').

So what?

So mainstream economics is insane, as explained in the latest MMT post.

Back to top

IP Logged

thegreatdivide

Gold Member

Offline

Australian Politics<br
/>

Posts: 15443
Gender: male

Re: backing a currency with gold
Reply #22 - Mar 26^th, 2024 at 1:16pm

MeisterEckhart wrote on Mar 22^nd, 2024 at 5:28pm:

thegreatdivide wrote on Mar 22^nd, 2024 at 12:34pm:

MeisterEckhart wrote on Mar 22^nd, 2024 at 10:38am:

thegreatdivide wrote on Mar 22^nd, 2024 at 10:32am:

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

"Bad news" about the US economy?

Should have included the third reason - a fall in the value of the US dollar.

...which gets us back to the insanity of mainstream economics: interest rates set by the central bank likely to fall, consequent to an improving economy, so the 'value' of the currency ( to exchange traders) decreases because people are worried by increasing govt. debt (which is another mainstream myth, ie the govt's debt seen as household debt which 'must be repaid').

More like, with interest rates dropping investors are not getting enough bang for their buck, so they turn to gold.

That's right - in an insane financialized economy, where rich 'investors' don't want to create goods and services but only play the financial casino.

Back to top

IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #23 - Mar 28^th, 2024 at 10:16am

thegreatdivide wrote on Mar 26^th, 2024 at 1:16pm:

MeisterEckhart wrote on Mar 22^nd, 2024 at 5:28pm:

thegreatdivide wrote on Mar 22^nd, 2024 at 12:34pm:

MeisterEckhart wrote on Mar 22^nd, 2024 at 10:38am:

thegreatdivide wrote on Mar 22^nd, 2024 at 10:32am:

MeisterEckhart wrote on Mar 21^st, 2024 at 12:13pm:

MeisterEckhart wrote on Mar 21^st, 2024 at 9:13am:

The gold price is skyrocketing again.

It has hit a USD 2210 (AUD 3330) intraday high so far. This Friday's COMEX market close prices will determine whether it can be sustained.

Moves like this often immediately follow a world event (if not significant bad news about the US economy)...

I wonder what's up.

Ah... The long-awaited US rate cut.

Unemployment rate falls to 3.7pc in February, US Federal Reserve likely to cut rates in June, ASX higher after Wall Street soars

"Bad news" about the US economy?

Should have included the third reason - a fall in the value of the US dollar.

...which gets us back to the insanity of mainstream economics: interest rates set by the central bank likely to fall, consequent to an improving economy, so the 'value' of the currency ( to exchange traders) decreases because people are worried by increasing govt. debt (which is another mainstream myth, ie the govt's debt seen as household debt which 'must be repaid').

More like, with interest rates dropping investors are not getting enough bang for their buck, so they turn to gold.

That's right - in an insane financialized economy, where rich 'investors' don't want to create goods and services but only play the financial casino.

Where any investor (including Chinese ones) wants to see the best return on their investment - when speculation of a weakening US dollar increases, beat the rush and convert dollars into gold, or Yuan into gold on the SSE.

Back to top

IP Logged

freediver

Gold Member

Offline

www.ozpolitic.com

Posts: 53254
At my desk.

Re: backing a currency with gold
Reply #24 - Mar 28^th, 2024 at 10:23am

thegreatdivide wrote on Mar 22^nd, 2024 at 10:29am:

freediver wrote on Mar 21^st, 2024 at 9:16am:

thegreatdivide wrote on Mar 21^st, 2024 at 9:07am:

freediver wrote on Mar 19^th, 2024 at 9:26am:

Suppose I give you US$1,000,000 in exchange for Euros. Then you give me the Euros back in exchange for US$. And we repeat a million times. How much gold would be required to account for all of those transactions?

None.

Next question?

Why did you post this?

Quote:

No, because there isn't sufficient gold in the world to account for '90% of foreign exchange transactions'

Because that's what Nixon concluded: the US didn't have enough gold if US trading partners lost faith in the US dollar and demanded payment in gold.

"Nixon publicly stated his intention to resume direct convertibility of the dollar after reforms to the Bretton Woods system had been implemented, (but) all attempts at reform proved unsuccessful".

What does the 90% of foreign exchange transactions bit mean? That there was enough gold to cover 10% of all foreign exchange transactions?

Back to top

People who can't distinguish between etymology and entomology bug me in ways I cannot put into words.

IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #25 - Mar 31^st, 2024 at 4:08pm

Zimbabwe makes foray into gold-backed CBDC

Zimbabwe has turned to the gold standard in the hope of buttressing the beleaguered Zimbabwean dollar, first issuing gold coins and later digital tokens that it hopes to see used as a means of payment.

https://www.omfif.org/2023/11/zimbabwe-makes-foray-into-gold-backed-cbdc/#:~:tex...

Back to top

IP Logged

Jasin Gold Member Offline Posts: 56855 Gender:	Re: backing a currency with gold Reply #26 - Mar 31^st, 2024 at 4:10pm Zimbabwe brings out 'Gold' in your hands. Australia adopts a cashless economy. Money: It's out of your hands now.
Back to top	AIMLESS EXTENTION OF KNOWLEDGE HOWEVER, WHICH IS WHAT I THINK YOU REALLY MEAN BY THE TERM 'CURIOSITY', IS MERELY INEFFICIENCY. I AM DESIGNED TO AVOID INEFFICIENCY. IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #27 - Apr 2^nd, 2024 at 8:20pm

freediver wrote on Mar 17^th, 2024 at 10:28am:

Quote:

No, because there isn't sufficient gold in the world to account for '90% of foreign exchange transactions'

You don't need more gold every time there is a transaction.

This is a misunderstanding about gold-backing a currency.

It only matters what the currency is denominated at relative to the gold weight unit.

There is a rumour that the reason the gold price is soaring is that governments and banks are preparing for gold-backed CBDCs which will raise confidence in the new digital currencies.

Zimbabwe is currently the guinea pig.

If true, the unit weight of gold (1 troy ounce) could soar to over USD 5000 (approx AUD 7500) within the next 2 years.

Let's see!

Back to top

IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #28 - Apr 3^rd, 2024 at 8:15am

If it's true that governments and central banks are preparing to back their respective CBDCs with gold, then a process of accumulating gold for that reason is required.

Something like Roosevelt's Executive Order 6102 in 1933 would be the most draconian way of retrieving gold from individual gold owners to back a CBDC.

An action like that would be unacceptable in 2024 and beyond.

A much easier way is to pre-determine gold's unitary value at, say, USD 5000 or more.

Anyone who bought gold at, say, USD 1000 (even USD 2000 - 3000) might easily be persuaded to sell their physical holdings to central banks for CBDC.

Back to top

IP Logged

MeisterEckhart

Gold Member

Offline

Australian Politics

Posts: 17122
Gender: male

Re: backing a currency with gold
Reply #29 - Apr 3^rd, 2024 at 9:21am

So how would a gold accumulation process by governments and central banks work?

The Shanghai Gold Exchange provides the answer.

The SGE is offering convertibility of gold units to Yuan at spot price + 0.4% to 0.5% which is an incentive for large gold traders to buy on the COMEX at almost spot and sell on the SGE for spot + 0.4%-0.5%.

If this were to occur in Australia and available to all, the RBA, CBA, Westpac, NB and ANZ might offer a better deal to small gold holders.

If, say, spot was at AUD4000/oz, the banks might offer a pegged value of AUD 5000/oz. Anyone holding gold could convert it with these banks for $5000 CBDC dollars per gold unit.

Back to top

IP Logged