Gold Standard Act

[Bono]

Section 1

Subsection 1

§1 The dollar consisting only of 0.00025 ounces of gold, shall be the standard unit of value, and all forms of money issued or coined by Atlasia shall be maintained at a parity of value with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity.

§2 Dollar bills, when presented to the Treasury for redemption, shall be redeemed in gold coin of the standard fixed in the 1st paragraph,  subsection 1, section 1 of this Act.

§3 In order to secure the prompt and certain redemption of
such bills, the Department of Treasure shall posses the amount of gold necessary to redeem all of the money supply in circulation.

Subsection 2

§1 The Federal Reserve is given a 2 months period, starting from the signing of this act unto law, where it shall not increase the money suply, and will accquire all the gold needed for backing of the current money supply, selling it's reserves of foreign currency, and pay all its debt and bank demand deposits. This shall be paid in promissory bills on the Department of Treasure, due 3 months after the signing of this act unto law.

§2 After that period, the Federal Reserve System shall be closed perpetually, and the gold in its possession shall become possession of the Department of Treasure, which shall keep it in the terms of paragraphs 2 and 3, of subsection 1, section 1 of this act.

§3 Paragraph one, of subsection 1, section 1 of this act shall become effective after the 2 month period mentioned on paragraph 1, of subsection 2, section 1 of this act.

§4 The regulatory powers of the Federal Reserve over banks shall be transfered to the Department of Treasure.

Section 2

§1 Fractional reserve banking shall be illegal throughout Atlasia.

§2 Banks shall have one month after the gold value of the dollar becoming effective to regularize their situation to compliance of the terms of this act.

[A18]

I urge the Senate to reject this proposal.

[KEmperor]

I urge the Senator to edit the title of this thread.

[Gustaf]

You silly libertarians.

There is no need to go back to that nonsense. P:

[Bono]

You silly libertarians.

There is no need to go back to that nonsense. P:

I suppose Hayek, Milton Friedman, von Mises, Rothbard, among others, are all "silly".

Here's two papers on teh thing:
The ase for a Genuine Gold Dollar, by Murray Rothbard

Gold and Economic Freedom, by Alan Greenspan

Keep in mind Greenspan never recanted any of the views stated on that paper.

[Colin]

Bono, Will the Federal Reserve still have its Supervision and Regulation powers? Right now the Federal Reserve also acts to regulate banks and to investigate fraud, scandal, money laundering and other criminal acts that may cause a bank to fail.

[John Dibble]

Just an opinion, but it might be safer to back the dollar with silver and platinum as well as gold.

[Bono]

Just an opinion, but it might be safer to back the dollar with silver and platinum as well as gold.

Rothbard was against bimetallism. His reasons here.

[7,052,770]

Bryan and Free Silver!

But seriously, is this really necessary?  We've been off the gold standard for a while and we're still truckin'.

[A18]

The money supply should not be controlled by random events.

Better idea: abolish the Federal Reserve as an institution and give their job to Congress.

[True Federalist (진정한 연방 주의자)]

1. I am against returning to the gold standard for a vast number of reasons, both technical and economic.
2.  I am even more strongly against bimetallism.
3.  How much of a windfall are you hoping to gain from the gold you own if you succeed in having gold valued at $4000 per ounce? (Approximately 10 times its current value.)
4.  Which ounce? troy (480 grain) or avoirdupois (437.5 grain)?

[Colin]

Probably troy ounce since that is currently more widely used.

[DanielX]

I propose that, instead of gold, a 'commodities  basket' be used including such items as Silver, Platinum, diamonds, crude oil, pork bellies, and yes, Gold. This will give the dollar more stability than either Gold alone or the current morass of a system.

I also believe the dollar should be exchangeable for said commodities at a market rate.

Senators, are you listening?

[Bono]

1. I am against returning to the gold standard for a vast number of reasons, both technical and economic.
2.  I am even more strongly against bimetallism.
3.  How much of a windfall are you hoping to gain from the gold you own if you succeed in having gold valued at $4000 per ounce? (Approximately 10 times its current value.)
4.  Which ounce? troy (480 grain) or avoirdupois (437.5 grain)?

In which ounce is the gold valued in the market palce? IF it is troy, than that one.
The gold needs to be valued at $4000 becaus that is the value needed to pay all federal reserve debt and bank demand deposits., and consistent with the current money supply.

[Bono]

I propose that, instead of gold, a 'commodities  basket' be used including such items as Silver, Platinum, diamonds, crude oil, pork bellies, and yes, Gold. This will give the dollar more stability than either Gold alone or the current morass of a system.

I also believe the dollar should be exchangeable for said commodities at a market rate.

Senators, are you listening?

How do you propose to reddem someone with pork bellies?
No, bimetallism and other forms of basket currencies are contreproductive, and allways backfire. I anyone had botehr to read the articles I linked, they would understand why gold alone is the only proper currency.

[Bono]

The money supply should not be controlled by random events.

You mean like it is now? It's much harder to inflate gold than to inflate pieces of paper, you know?

[Bono]

Bryan and Free Silver!

But seriously, is this really necessary?  We've been off the gold standard for a while and we're still truckin'.

Since 1913 we've been experiencing periodic recesions due to the federal reserve system inflating of the money suply. IF you call that "Still truckin'". than oppose me.

[Filuwaúrdjan]

Thou shalt not crucify man on a Cross of Gold

[John Dibble]

Thou shalt not crucify man on a Cross of Gold

Nobody is being crucified.(yes, I know this is a metaphor)

If you have a problem with the idea of a gold standard, then make a real argument against it.

[True Federalist (진정한 연방 주의자)]

OK, I'll bite.  First off the economic.  As far as keeping our economy going, it is a sad but true fact of human psychology that the best way to accomplish that is with a currency that has a mild but predictable rate of inflation.  Because of the introduction of new goods and the expansion of the population, being on the gold standard would be inherently deflationary, which causes people to hoard wealth in unproductive forms rather than to spend or to invest it in ways that stimulate the economy as is the case with mild inflation.

Next, the technical.. The sad fact is that a circulating gold coinage would be extremely sucecptable to counterfieting and adulteration today.  In the late 19th century there was a metal that because of advances in smelting tech had just recently become available in quantity, but which no one had yet put to productive use.  This new material was approximately the same density as gold, but it was much cheaper, so that it was feasible to slice up a gold coin so as preserve the front and back, scoop out the inside and fill the middle with this new metal.  The small scars that remained on the adulterated coin once it was reassembled, could be hidden in the usual wear and tear that circulating coins suffer from.  Why did this practice come to a halt?  Not because it became easy to catch, but because as this gold "substitute" was put to productive use in own right, and rose in price until it reached the point that the subsitute,  platinum, was more valuable than gold.  Thanks to advances in materials technology since the 1930's, there are all sorts of fake gold that could be used.  Heck, with gold valued at $4000 an ounce, it would feasible to use platinum again unless of course this valuation pegs gold at such a high dollar value that it causes massive inflation during the conversion to the gold standard.

If, in order to avoid the perils of the above, we try having a non-circulating gold backing, then you having to both simultaneously trust the government to keep its word about redeeming the money and have a money supply that would suffer wide swings in the amount available as it would be subject to only a single controlling input, the demand for gold.  That demand is not always in sync with the rest of the economy, despite what gold bugs delude themselves into thinking.  If it were always in sync with the rest of the economy then gold could be a useful self-correcting mechanism for the economy.  However, if that were the case, then why wouldn't silver or other commodities remain in sync and thus make bimetallism useful.  There is nothing magical or mystical about gold that makes it immune to the problems of other commodities.  When the demand for gold is out of sync with the economy that unsyncedness will induce deflation or inflation that otherwise would not be there.

[??????????]

I back this bill 100%.

[Siege40]

I wish to reduce my ignorace, (Back of the Senate: Good luck!) does this act make the currency literally gold, or is all currency in Atlasia merely back by Gold stored in the reserve and paper money, representing this gold continues to circulate?

Siege

[??????????]

I wish to reduce my ignorace, (Back of the Senate: Good luck!) does this act make the currency literally gold, or is all currency in Atlasia merely back by Gold stored in the reserve and paper money, representing this gold continues to circulate?

Siege

I believe it is based on the old system of being backed by gold and not actually using gold for currency.

[Bono]

I wish to reduce my ignorace, (Back of the Senate: Good luck!) does this act make the currency literally gold, or is all currency in Atlasia merely back by Gold stored in the reserve and paper money, representing this gold continues to circulate?

Siege

I believe it is based on the old system of being backed by gold and not actually using gold for currency.

Yes. But if you wanted, you could go to the departmenf of treasure , give them your money, and they would give you the equivalent in gold.

[Siege40]

In point form, and in easy to understand terms, what are the definitive benefits, and problems with this currency system?