U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 11-29-2019, 11:32 AM
 
9,440 posts, read 4,165,112 times
Reputation: 1858

Advertisements

Quote:
Originally Posted by Garthur View Post
I used to think the same as you, 30 years ago. But, I've had time to research it and realize that I was grossly wrong.

US stamped gold coins are official US money according to the treasury. In most states, sales tax isn't applied to gold acquisition because it is consider an asset transfer from the dollar to Gold.

BTW, technically Gold IS money and the dollar is currency. Our culture has transpose the 2 meanings to be the same.
You still think the same as me. Maybe re-read what I posted.

Gold bullion is money, but just not a very good one for most transactions.
Reply With Quote Quick reply to this message

 
Old 11-29-2019, 11:50 AM
 
Location: Western Washington
9,703 posts, read 8,878,097 times
Reputation: 16798
Quote:
Originally Posted by Garthur View Post
I used to think the same as you, 30 years ago. But, I've had time to research it and realize that I was grossly wrong.

US stamped gold coins are official US money according to the treasury. In most states, sales tax isn't applied to gold acquisition because it is consider an asset transfer from the dollar to Gold.

BTW, technically Gold IS money and the dollar is currency. Our culture has transpose the 2 meanings to be the same.
Ok, gold coins are money and there used to be some semantic difference between money and currency.

So what? I cannot use gold coins to purchase my groceries, order something online, or pay my electric bill. As money it is impractical. As for the difference between money and currency, that seems to be irrelevant.
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 12:05 PM
 
9,440 posts, read 4,165,112 times
Reputation: 1858
Moneyness

https://www.pragcap.com/understanding-moneyness/
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 12:18 PM
 
Location: Silicon Valley
3,956 posts, read 1,804,712 times
Reputation: 6634
I'd still echo MJ's setiment that a crypto currency actually backed by something (gold being a logical choice) could quickly be adapted as a reserve currency of choice.

That WAS the original architecture of the US dollar. It was supposed to be the gold backed reserve currency for all other nations.

China may try for one. It would make sense if they start selling Treasuries. Whether Americans or Europe liked it wouldn't matter...30 years from now the epicenter of the economic world will be firmly in Asia. The "West" has will start punching at weight again from its oversized stature of the past 200 years.

What seems more likely is the IMF type organization will arise to do the same. It would have to not be US backed as the US will never endanger the USD reserve status. However a new international organization could easily arise to support the founding.

For all of her faults, Russia, by virtue of being locked out of so many markets for so long, actually has very little debt and tons of natural resources, clout and a military none would want to face in conflict.

India has a high amount of gold in the citizenry. The Saudis have everything gold. Germany has the wherewithal to do it.

None would be probable, but America appears to have lost even the pretense of practicing good habits with its currency. 10 years into a bull market and we're running massive deficits and paying nothing to be serviced. We're failing as the prudent leader of the free and industrial world that understands the importance of a bedrock currency for the world.

I'd put the US dollar fall at 2 of 10 in the next 30. I think it's worthwhile to accumulate a bit of physical gold each year.
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 12:34 PM
 
Location: Western Washington
9,703 posts, read 8,878,097 times
Reputation: 16798
Quote:
Originally Posted by artillery77 View Post
I'd still echo MJ's setiment that a crypto currency actually backed by something (gold being a logical choice) could quickly be adapted as a reserve currency of choice.
Not possible. Bitcoin has a global value of $41 billion. As noted above, the US federal gold reserve, which is the largest on the planet, is only $11 billion. Where are you going to find the precious metals to do this?

Quote:
That WAS the original architecture of the US dollar. It was supposed to be the gold backed reserve currency for all other nations.
Yes and no. The original US dollar was backed by gold, but the original intent was never to be a reserve currency for all nations. That happened after two world wars that destroyed the fiscal reserves of the large European countries, who found themselves owing lots of money to the US after the dust settled.


Quote:
India has a high amount of gold in the citizenry. The Saudis have everything gold. Germany has the wherewithal to do it.
There are not enough gold reserves in the world to fully back any currency of note. You certainly could not do it by backing it with gold held by Indian citizens. German gold reserves are about 40% of what the USA has, and Saudi doesn't even make the top 10.
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 01:58 PM
 
6,230 posts, read 2,289,279 times
Reputation: 7852
This is easy. There is ZERO chance China will displace the US dollar as the world's primary reserve currency.


The US dollar is the dominant world currency because we have transparency in our markets, fiscal policy, and independent credit ratings in addition to being No. 1 in GDP. President Xi is a communist party hardliner. It is very difficult to trust banking and economic data coming out of China for that reason. And China's debt-to-GDP ratio is estimated to be north of 300%, far worse than the U.S.'s 106% (but going higher due to Trump's terrible fiscal and tax policies).

The only way China could challenge the US is in the extremely remote chance that the people overthrow the communist party and become a market-based democracy and install transparent institutions like Western Democracies have.
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 02:43 PM
 
9,440 posts, read 4,165,112 times
Reputation: 1858
Quote:
Originally Posted by Elliott_CA View Post
This is easy. There is ZERO chance China will displace the US dollar as the world's primary reserve currency.


The US dollar is the dominant world currency because we have transparency in our markets, fiscal policy, and independent credit ratings in addition to being No. 1 in GDP. President Xi is a communist party hardliner. It is very difficult to trust banking and economic data coming out of China for that reason. And China's debt-to-GDP ratio is estimated to be north of 300%, far worse than the U.S.'s 106% (but going higher due to Trump's terrible fiscal and tax policies).

The only way China could challenge the US is in the extremely remote chance that the people overthrow the communist party and become a market-based democracy and install transparent institutions like Western Democracies have.
Cross border currency controls would have to go. China may never even want the responsibility of creating a world reserve.

https://foreignpolicy.com/2011/09/07...bitant-burden/
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 03:19 PM
 
190 posts, read 80,552 times
Reputation: 297
My understanding is that the US ended being the worlds dominant currency not due to transparency or strong fiscal policy, but rather essentially by accident. We were the only industrial power left standing after The Event and we had 2/3s of the worlds gold.
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 03:30 PM
 
9,440 posts, read 4,165,112 times
Reputation: 1858
Quote:
Originally Posted by Taggerung View Post
My understanding is that the US ended being the worlds dominant currency not due to transparency or strong fiscal policy, but rather essentially by accident. We were the only industrial power left standing after The Event and we had 2/3s of the worlds gold.
The Arsenal of Democracy by no accident was the stand alone major power standing post-WW2. And that gave the USA a huge head start. The Marshall Plan then pushed it all along. But essentially no gold was actually needed to prosecute and win the War along with our Allies. (aside from electronic uses/needs)
Reply With Quote Quick reply to this message
 
Old 11-29-2019, 04:08 PM
 
Location: Western Washington
9,703 posts, read 8,878,097 times
Reputation: 16798
Quote:
Originally Posted by Taggerung View Post
My understanding is that the US ended being the worlds dominant currency not due to transparency or strong fiscal policy, but rather essentially by accident. We were the only industrial power left standing after The Event and we had 2/3s of the worlds gold.
If by The Event you mean WWII, then yes that is true. Transparency, stability and sheer size has helped maintain the dollar as the dominant currency, although the Euro has made inroads.

As for gold, nope, not a factor. To bring another fact into this, current US gold reserves are 8,133 tonnes out of a world gold supply of 190,000 tonnes. So, the USA has approximately 4% of the worlds gold. Not sure what the percentage was post WWII, but it certainly wasn't 2/3 of the world supply.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top