Friday, July 1, 2011

The Gold Standard

I'm not an expert on currency. I do know that when we were on the gold standard, an American citizen couldn't legally own gold bullion. In 1933 Franklin D. Roosevelt made it illegal for any person in the United States to own hoards of gold. The ban was not lifted until legislation was signed in 1974 by President Gerald Ford. There likely isn't enough gold to run our economy, so what would our country do if there wasn't a sufficient supply of gold backed currency to run multi billion dollar companies and pay salaries of millions of employees?

I've always wondered what makes gold valuable in the first place. You can't eat it, plant it, or shoot it (well, you could mold it into bullets). In a financial collapse, I would rather own agricultural land, non-modified seed, a plow, a good mule, firearms, and plenty of ammo. So, whats so great about gold? Pieces of cardboard (called baseball cards) are sometimes more valuable. Maybe we should turn to baseball cards to back our currency?

I also find it amazing that sellers of gold tell us that gold may double in value, yet are willing to sell me their valuable gold for my worthless paper currency. I just don't get doesn't compute. If the brokers thought what they were advertising were true, why wouldn't they hang on to their gold and double their fortunes? I don't know folks, you tell me.

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