I read somewhere that if they brought back the Gold Standard

Gold would be valued at over US$100,000 per ounce.   

That is how much money they printed.   

Do you understand what I posted TGD?

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?

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.

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

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

While it is rumoured that Russia and China are moving towards gold backing the Rouble and Yuan, the CCP currently offers convertibility to gold for Yuan on the Shanghai Stock Exchange.

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


"Bad news" about the US economy?

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

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

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


So what?

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

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.

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


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

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

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.

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...

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

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!

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.

thegreatdivide wrote on Apr 5^th, 2024 at 2:21pm:


You mean literally shipping goods one way (into the US) and shipping gold the other (out of the other)?

People would just start shipping gold back into the US, as it would very soon be worth more in the US than in other countries.

Or they would just be smart enough to not physically ship huge amounts of gold back and forth around the world.

I think you are very confused about what Nixon was actually thinking.

From what I read once -
the USA has printed so much money that the true price of an ounce of Gold
would be about US$120,000 per ounce not $2,300 per ounce
if we went back to the Gold Standard.

In other words -
the USA has printed 52 times more money than the equivalent Gold Standard.
The printing presses have been running hot -
24 hours a day -
the US Govt. is now in $33 trillion of debt.

This financial year the US is on track to spend about $US870bn on interest, which is equivalent to 17 per cent of tax revenues, the highest since the 1980s. That’s already more than the defence budget, and soon will eclipse even social security as the single biggest government expense.


Unprecedented central bank money creation during the Covid-19 pandemic has cast doubt on the long-term stability of financial systems, not to mention economic experts who failed comprehensively to predict the return of high inflation.

More and more people are avoiding saving in cash and bank deposits to avoid a sudden collapse in their purchasing power.

Soaring asset prices throughout rich countries (where similar if not quite so bad economic policies have been introduced) could reflect a decline in value of fiat currencies used to buy them as much as a genuine increase in asset values for fundamental reasons. In terms of gold or bitcoin, they haven’t gone up at all.

The lesson of the past few years for politicians should have been caution, but instead the pandemic has fuelled hubris and a return to artificially complex, vast subsidy schemes that would make the planners of generations ago proud.

Whoever wins the presidential election in November could well inherit an economic disaster. Far from cutting taxes again, as he did in his first term, a re-elected Donald Trump might have to increase them significantly to restore faith in US economic policy.
https://www.theaustralian.com.au/inquirer/bidenomics-hits-the-skids-as-costly-po...

TGD,
Quote:


That's obvious.
I think Govts should have to balance their books like everyone else -
they should borrow money only in emergencies and
when there is a plan for more taxes to pay it off.

It's out of control everywhere we look:
https://www.ozpolitic.com/forum/YaBB.pl?num=1714798277/0#1

Politicians have a thought bubble -
and the next thing there goes another $200 billion on some idea
and no one knows how it will ever be paid for.

Bobby. wrote on May 4^th, 2024 at 3:04pm:


I used to think that too, until I learnt about the currency-issuing capacity of sovereign governments - which makes their budgetary constraints ("balancing their books") completely  different "to everyone else", ie, you and me, who have to earn or borrow money.   

I'm offering no taxes, no government borrowing, zero central bank interest rates,  and price controls to manage inflation....a pity you reject it.....

Quote:


In short: if the government has the resources to build/service it  (the "thought bubble") , the government can pay for it - for free, ie, via keystrokes on computers in the Department of Treasury.

 

Bobby. wrote on May 5^th, 2024 at 2:55pm:


I'm offering no taxes and no inflation. You?


Quote:


See above.

https://apnews.com/article/zimbabwe-zig-new-currency-5173a73586eef8ad413964f3341...




May 1, 2024

HARARE, Zimbabwe (AP) — Out with the Zimbabwe dollar, in with the ZiG.

Zimbabwe on Tuesday started circulating a new currency to replace one that has been battered by depreciation and often outright rejection by the people. The ZiG was introduced electronically in early April, but people are now able to use banknotes and coins.

It’s the southern African country’s latest attempt to halt a long-running currency crisis underlining its persistent economic troubles. The government had previously floated various ideas to replace the Zimbabwe dollar, including introducing gold coins to stem inflation and even trying out a digital currency.

Since it was launched electronically on April 5, the ZiG —
—
appears to be heading down the same path of mistrust, with some government departments refusing to accept it.

The ZiG is the sixth currency Zimbabwe has used since the spectacular 2009 collapse of the Zimbabwe dollar amid hyperinflation of 5 billion percent, one of the world’s worst currency crashes to date. That set off a chaotic series of events: first the U.S. dollar was allowed as legal tender, then banned, then unbanned.

A new “bond note” became legal tender, the Zimbabwe dollar was reintroduced before the gold coins and digital currency were tried.

However, nothing brought any currency stability and the U.S. dollar remains the most trusted for ordinary Zimbabweans.

As the shiny new ZiG banknotes hit the streets, the mistrust was evident.

Kudzanayi Mande, a vegetable trader at the crowded Mbare market in the capital of Harare, said she would rather forgo a sale than accept the ZiG. She was confused, the 56-year-old said.

“Already there is an official exchange rate and a depreciated black market rate, so I will wait a bit to see what its real value is,” she said. “The U.S. dollar is still a safer bet.”

The government has allowed some businesses, such as gas stations, to refuse to accept the ZiG in favor of U.S. dollars. Some departments, like the office that issues and renews passports, accept only U.S. dollars.

At the same time, other businesses are being ordered to only use the ZiG, and face punishment if they don’t.

Bobby. wrote on May 5^th, 2024 at 4:45pm:


Stop making out I haven't already explained your errors re hyperinflation in  Zimbabwe, Weimar republic and Venezuela (in the MMT thread). 

Inflation is always the result of supply chain failures (whether inter- or intra-national), or loss of capacity to pay for imports because your exports fall in value.   

Bobby. wrote on May 6^th, 2024 at 1:33pm:


Simple-minded 'government as household' orthodoxy; it's a question of who is doing the money printing, and what for. 

Govt. can print money AND control inflation, by ensuring balance between supply and demand for resources.

Quote:
 

The US, Japan, Oz, the UK, France, and many more,  have never experienced hyperinflation, so it's not likely in the future.

Quote:
 

Correct: when the RBA was called upon to pay the bills of locked-down workers - to keep them alive - the RBA should have joined with Treasury in issuing free money, to avoid creating debt which must be repaid to bond holders. 

And the nation would still  have been "living within its means", without creating a build-up in citizen's purchasing power which would later cause inflation due to supply chain failures.

Bobby. wrote on May 6^th, 2024 at 2:27pm:

Er-- you are confusing inflation with hyper-inflation., which most countries have never experienced.

Do try to keep up....

And the 2nd part of my post you completely ignored......

Bobby. wrote on May 6^th, 2024 at 2:48pm:


Nevertheless  many nations around the planet did it - perhaps they had information you didn't? (And poor Boris's career was destroyed because he had a party while everyone else was locked up).

Quote:


And yet it was accepted by most governments as a global pandemic. Even India banned travel within the country.

Quote:


That's correct; and I explained to you what it SHOULD have done, which you can't - or refuse - to refute in any intelligent manner.