Today’s politicians don’t like to talk about a gold standard. In 1914 Germany went off a gold standard which allowed the government to fund WWI. In 1924 the Papiermark became worthless and people used it in their stoves to warm their homes. It was at this time the government went back on a gold standard, using the new Reichsmark to be the gold backed currency.
Today’s macroeconomists at the Fed and American politicians like their German counterparts in the early 1920’s may not want to talk about a gold standard but that reality is fast approaching where it will be unavoidable. Currently the dollar of 1971 buys 4 to 6 cents of its value now. Financial commentators like Steve Forbes, economist Judy Shelton, Austrian school economists, and even though Ray Dalio has not advocated for a gold standard he believes it will be necessary to deal with a currency collapse.
In a fiat currency system relies on the government becoming a holder of credit much like your credit card company. You create debt with the use of your card and the company gives you credit for the people you’re paying but you’re responsible for the payment. Physical gold in your possession is not a financial claim on any institution, government, or company. It cannot be defaulted upon, nor does it depend on government solvency. When a currency is backed by gold, the holder of the currency can ask the government for redemption of the currency in gold when requested.
TY Edwin for your great Qs and commentary & Adam for your tremendous knowledge & analysis.
A Case For A Gold Standard
Today’s politicians don’t like to talk about a gold standard. In 1914 Germany went off a gold standard which allowed the government to fund WWI. In 1924 the Papiermark became worthless and people used it in their stoves to warm their homes. It was at this time the government went back on a gold standard, using the new Reichsmark to be the gold backed currency.
Today’s macroeconomists at the Fed and American politicians like their German counterparts in the early 1920’s may not want to talk about a gold standard but that reality is fast approaching where it will be unavoidable. Currently the dollar of 1971 buys 4 to 6 cents of its value now. Financial commentators like Steve Forbes, economist Judy Shelton, Austrian school economists, and even though Ray Dalio has not advocated for a gold standard he believes it will be necessary to deal with a currency collapse.
In a fiat currency system relies on the government becoming a holder of credit much like your credit card company. You create debt with the use of your card and the company gives you credit for the people you’re paying but you’re responsible for the payment. Physical gold in your possession is not a financial claim on any institution, government, or company. It cannot be defaulted upon, nor does it depend on government solvency. When a currency is backed by gold, the holder of the currency can ask the government for redemption of the currency in gold when requested.
Removal is June 12th! Loved this conversation!