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Not true.Your statement assumes that the present exchange ratio (or a lower ratio) between a weight of gold and paper money is the exchange ratio that must prevail in a gold standard. Such obviously is not the case. Doubling the exchange ratio, for example, doubles the money supply. Lower prices under a gold standard eliminate the necessity for such large sums. There is also enormous amounts of gold in existence. There is around 35,000 metric tons of gold in central banks and government treasuries around the globe. The United States government, officially holding 264 million ounces (8,227 tons), owns about one-fourth of that total. The best estimate on the total amount of gold in the world is three billion ounces, meaning that about one-third of the world's gold is held by governments and central banks, and two-thirds by private persons. Gold, unlike most commodities remains in existence. It isn't burned or consumed.
If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.
-William Jennings Bryan, 1896
Assuming that a) there would be an equal distribution and b) that every country would go on a gold standard is faulty.
Your other assumption about there not being enough gold in Fort Knox to support to US economy is also faulty because it ignores gold that is owned privately. It also ignores the fact that prices would decided by the market which means it would take less money to buy more.
No, it is your assumption that gold is more plentiful that is wrong. Frankly, if you want to wrestle away all the gold jewelry to stamp into gold dollars, go for it. But it won't be enough.
Gold - Wikipedia, the free encyclopedia
A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces.
Divided by 6.7 billion people.
Less than one ounce per capita.
Not enough to function as a useful medium of exchange.
And I hate to see what "small change" would be.
Frankly, the national debt, over 14 trillion dollars, computes to an obligation to pay over 700 billion ounces of gold, stamped into coin. Obviously, Congress was never lent 14 trillion dollars. (See Coinage Act of 1792, et seq).
Simply make each U.S. dollar worth .000001 ounces of gold and allow the exchange rate to float on the open market.
Anyone holding a dollar can redeem it for .000001 in gold. That would force banks to severely limit loans. Only the soundest business plans and credit seekers would get funded.
We would squeeze bad investments out of the financial system and everyone would be forced to be adults with their money and finally use their brains.
Congress' credit card would be shredded and Americans would finally begin to be free of the Federal Reserve.
Heck, maybe America would return to making things again.
The "simple solution" would only require the scrapping of the USCON.
Read Art. 1, Sec. 8, Sec. 10, and the seventh amendment, as well as the Coinage Act of 1792.
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