Return to the Gold Standard: Can't Live With It, Can't Live Without It

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...Certainly a return to a monetary standard in gold is now impossible, for the revaluation of currencies that would occur would effectively bankrupt a good portion of the G7 nations. If you think of gold as Tier 1 capital, and currency as leveraged derivatives (which is essentially what they are), most sovereign banks would miserably fail the Tier 1 capital ratio requirements of today. It would make the current liquidity crisis insignificant.

Let me state at the outset the thesis of this essay: Gold remains the only standard by which the global financial system's currencies can uniformly be measured throughout history, and is indeed the most basic and reliable benchmark of value for everything from commodities to T-bills.

The disinformation campaign initiated by president Nixon in 1971, subsequently confirmed and endorsed by congress, was nothing less than a Orwellian-esque attempt at doublespeak to obscure the act of abolishing the global commitment to the gold standard for what it really was: the default by the United States, in effect, on its $3.8 billion deficit in trade.

The brainwashing job perpetrated by Universities and so-called economists since then on the general public is impressive in its scope and downright awesome in its scale. These days, if you voice any kind of support for the idea of a return to the gold standard, you're dismissed as a quaintly naive boob with no firm grasp on the realities of our complex global financial system.

Certainly a return to a monetary standard in gold is now impossible, for the revaluation of currencies that would occur would effectively bankrupt a good portion of the G7 nations. If you think of gold as Tier 1 capital, and currency as leveraged derivatives (which is essentially what they are), most sovereign banks would miserably fail the Tier 1 capital ratio requirements of today. It would make the current liquidity crisis insignificant.

So we're in a position now where we have no choice but to continue with our delusion, for correcting the compounded follies of our past would be too painful, or at least, that's the way its going to play, regardless of a minority's desire for a more responsible approach to accounting. We are the quaintly naive boobs...

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