Is it too late to save the "VALUE" of the American dollar?
According to this report there is approximately 157,000 metric tonnes of Gold in existence. {1 tonne is 32,150 ounces}
http://www.plata.com.mx/plata/plata/comh...
So, there is plenty of Gold available despite what critics say. Of course the price per ounce may sky-rocket until an equalibrium is reached.
Answer:
actually the Libertarian philosophy is normally associated with the dollar on the gold standard. I am a Libertarian and I agree with doing it. Generally, Democrats do not want the gold standard as it really limits government spending and printing money
not to late just vote democrat
It will only be too late if USA has a lease on its land.
Why would the government want to save the value of the dollar. A devalued dollar makes exports cheap and imports expensive. With the current trade defecit at record levels the government is likely trying to narrow this. What better way then by allowing the currency to depreciate. If we decide to deviate from a floating rate currency to a pegged rate currency. If we elect to go back to a pegged currency then there could be problems.
Fixed currencies, can often lead to severe financial crises since a peg is difficult to maintain in the long run. This was seen in the Mexican (1995), Asian and Russian (1997) financial crises: an attempt to maintain a high value of the local currency to the peg resulted in the currencies eventually becoming overvalued. This meant that the governments could no longer meet the demands to convert the local currency into the foreign currency at the pegged rate. With speculation and panic, investors scrambled to get out their money and convert it into foreign currency before the local currency was devalued against the peg; foreign reserve supplies eventually became depleted. In Mexico's case, the government was forced to devalue the peso by 30%. In Thailand, the government eventually had to allow the currency to float, and by the end of 1997, the bhat had lost its value by 50% as the market's demand and supply readjusted the value of the local currency.
Countries with pegs are often associated with having unsophisticated capital markets and weak regulating institutions. The peg is therefore there to help create stability in such an environment. It takes a stronger system as well as a mature market to maintain a float. When a country is forced to devalue its currency, it is also required to proceed with some form of economic reform, like implementing greater transparency, in an effort to strengthen its financial institutions.
Since the US has a strong regulating system and strong capital markets it wouldn't be in our best interest. Additionally the USD is the benchmark for many of the worlds currencies and creates demand. If we lose the benchmark it may cause items such as oil to be priced in a different currency causing further true depreciation and undermining the pegging system. Depending on Gold stores and scarcity this may prove to be an extremely poor long term plan.
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