Quote:
Originally Posted by slang
Good point, Clodfobble.
Tricky Dick took the dollar off the gold standard some time in 71, IIRC.
Before that disconnect one wouldn't need gold since a paper dollar was effectively gold. It was backed at some ratio to gold.
There were exceptions for jewelry but digging a big hole somewhere in your backyard to bury bullion wasn't even possible. The US gov't had the bullion gold in vaults.
Gold wasn't available to the public again until sometime in '75(?) because it was technically no longer money, it was just an element. The dollar was backed by the full faith and credit of the US. An individual didn't have the FFAC so they wanted gold bullion and started buying it.
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No no, dear friend. Just after the crash of the Great Depression, Roosevelt issued an order demanding that all gold be turned in as a way to fund The New Deal. The gold standard was never a guaranteed 1-to-1 ratio on the dollar, it was "a dollar equals what we say it equals," a number which changed regularly, and exchange markets compared to other currencies still applied. The whole point was they knew they were going to need extra money, so they took all the gold, giving the public the old exchange rate in bills, then said, "oh, gosh, you know what? This gold is now worth
more US dollars than we said it was before. Good thing we have it all to spend now." The U.S. had all the bullion in vaults after that *precisely because* they took it; prior to that there was plenty of gold floating around and being used for exchange, especially in frontier areas where banking wasn't as reliable.
My dad (a professional gold dealer, now retired) wrote a whole book on it called "Confiscation."
The point is, the government always does what it wants. You can try to be clever and go around them with a different system, but if they decide they don't like it, they have means of mass coercion at their disposal. (Insert standard "nuh-uh cuz I have guns!" argument here, except if they do a good enough PR job--by, for example, making everyone believe that "one wouldn't need gold"--then you're just a single looney in an irrational standoff that will end badly.)