Check out these two characters on CNBC this morning, Moorad Choudhry, head of treasury at the corporate banking division of RBS and Ralph Silva, director at Silva Research network. Choudhry described the idea of returning to the gold standard as 'nonsensical' and 'ludacris'.
In actuality, his comments were 'nonsensical', since he said there wasn't enough gold to back up US debt. Well, he's wrong here. Since this is simply a math problem. If you want to derive a relationship between gold and US debt, you take the dollar amount of US debt and divide it by the number of ounces of gold and you get debt per ounce of gold.
But note how Choudry seems more concerned about paying off government debt than actually having US gold used to back up the dollar---dollars which are held by average Americans. That's the gold standard---not directly backing up US debt. Also note that Choudry states that it was a good thing that the US went off the gold standard in the 1970s because it allowed the US to print money at will, as opposed to be limited by the quantity of gold. Bottom line: Choudry is a typical bankster, he is more concerned about insuring that government debt wil be paid off, even if it takes monetary inflation to do it, rather than showing any concern about the economic distortions caused by such money printing. He hates gold because he knows that it would stop mad government money printing.
Exponential Stupidity---one infinite source aside from FRN's.
ReplyDeleteChoudry is a financial expert and still deserve much respect despite being anti-gold standard. If government deficit is too large for its gold reserve to fully back it, then shouldn't gold price be revalued upward (in local currency, of course) to match the deficit and solve the problem? The problem, I think, is the USD being the reserve currency, thus revaluing the gold price would be a sticky matter. Or else, if gold becomes the reserve "currency", then any revaluation should be a piece of cake.
ReplyDeleteIf you think Choudry is a financial "expert" then either
Delete1. You're a fucking tool, or
2. You're a fucking tool of the bankers.
Not me, but you are.
DeleteYou're worse than a fucking tool.
You're a fucking shithead, with dog shit filled up between your ears.
You're a total dumb fuck dickhead shit.
Now top that, name-caller.
Have you boys ever thought of appearing on current affairs shows? you seem little overqualified but still....
DeleteThe issue of non-sound money will not go away despite what the bankers and their revolving door politicians-bureaucrats wish.
ReplyDeleteA small group of curious George's(and Jill's) understand the ludicrous system that has built up since 1913, and guys like Choudry are sent out to spew propaganda to thwart this knowledge, trying to keep it all going another week or two.
Problem is it is a giant FAKE. It is not real what is going on, and the Choudry's of the world know it.
The chewing gum, bailing wire, rubber bands holding the global money scheme in place are slowly but surely unraveling, at some point the masses will wake up to the sham that has evolved around the use of debt based paper money, digital money, fractional reserve banking, and watch out when they do, as there has never been a global currency panic in history I am aware of.
Choudhry is an imbecile, as Jim Rogers found out, being funded by the UK tax-payer:
ReplyDeletehttp://www.youtube.com/all_comments?v=m-Z3awCv1hQ
If only his intellect was as big as his mouth.
P.S. Choudry went to the University of Westminster in the UK, a 3rd rate institution for low academic achievers, and it's clear to see why. Anyone who pays any attention to the claptrap that he spouts deserves to lose all their money!
ReplyDelete"If government deficit is too large for its gold reserve to fully back it, then shouldn't gold price be revalued upward (in local currency, of course) to match the deficit and solve the problem? "
ReplyDeleteAbsolutely not. The gold price should not be revalued upward to match the deficit. Allowing the government to revalue the price of gold upward is effectively the same thing as allowing the government to print more money without regard to the amount of gold in the treasury. It is effectively the same thing as having an unbacked currency because the gold supply doesn't restrict how much the government can print. The end result is the value of the dollar is reduced and purchasing power is stolen from those who hold US dollars in the same way as under the current fiat currency system.
The entire point of having a gold standard is:
1) To keep the government from spending more money than it has, by forcing it to live within its means.
2) To maintain a relative, long term stability in prices.
Allowing the government to spend as much as it wants, and then just revaluing the price of gold in dollars is effectively allowing the government to print money while only giving an empty promise of the dollars backing. The result would be high inflation and price instability, as well as a continuously expanding debt. Meanwhile, the purchasing power of anyone who holds dollars would be stolen through inflation. Such a system is inherently dishonest.
What is the point of having a gold standard if you keep printing dollars regardless of how much gold is actually in the treasury? The gold standard would serve no purpose under such conditions. The government would keep spending beyond its means and inflation would continue. You may as well have a fiat currency at that rate
"is there even enough gold in the world to back US debt?"
ReplyDeleteApparently, these imbeciles don't understand the concept of supply and demand...Revalue your nation's gold, idiots. BUY PHYSICAL.