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RE: SITUATION CRITICAL: A Radical BUT REAL Way To Stop A Complete Worldwide Economic Collapse.
Concidering the amount of dollars in existence (and thats only the dollar - what about the others) I doubt the USA has enough gold to give them a gold backing that has significance. Nor have other countries, perhaps with the exception of China and Russia.
Sure, the government could declare that the Dollar is now backed with gold, but that would soon show to be a empty promise. Thats not better than what we have now.
And raising interest rates... sure it should happen for going towards a normalisation, but you know yourself what that would mean .
Hence a fractional gold backing.
Yes, fractional is ok, if its a meaningful fraction. If the fraction is too small, it has no value. Or rather, that dollar has no value.
And that gold has to actually exist, which is another question for now. Since nobody has seen it for decades. Well, nobody independant at least.
Yep. they would literally have to SHOW the gold by opening the vaults. And it is quite unlikely that even if they do have gold in the vaults, it would actually belong to them and not other countries. Ain't gonna happen. The gold is more than likely gone (or in much smaller supply than the supposed 8,000 tons). Most of it is in China now (which if anyone cares to do the research will see that they have in excess of 20,000 tons, no joke).
Yes, and even IF they have still 8000 tons, it would not really serve as a backing for all those trillions of dollars. Nobody really knows how many trillions it actually is. It would probably end up being a 0.0001% backing or something, which is meaningless. And they would have to stop creating new debt, too, which doesn't work anyway since everything comes to a grinding halt then.
Exactly. Well said. Not enough gold for adequate backing and the system would implode if they reversed any new issuance of debt - another thing Greg seems to forget which would not permit his proposal to work.
Well, the only other option would be, to evaluate gold at a entirely different level. Like $ 100,000 per oz, or so - but that would be like a dollar inflation in a way. Well, its what Greg always demands - a correction to fair value, of all assets.
But the other thing, no more debt, is even harder to achive. The whole system is based on growth, not on functioning at a permanent level. Everything is supposed to keep growing, which is a impossibility in itself. Yet we expect just that.