A Gold Bank?

[☭proletarian☭]

I know the States are not allowed to print currency, but is there anything stopping a state from starting a bank dealing with gold and silver stores and issuing gold/silver notes that would be used for transactions like we used to do?

 

[CrimsonWhite]

I know the States are not allowed to print currency, but is there anything stopping a state from starting a bank dealing with gold and silver stores and issuing gold/silver notes that would be used for transactions like we used to do?

No law against it. Probably not gonna happen until said state is completely self-sufficient.

 

[☭proletarian☭]

Probably not gonna happen until said state is completely self-sufficient.

Maybe that's why the Fed keeps mandating programs that necessitate using 'federal money' that the fed took form the State in the first place?


Think you could get enough people together to start such a system as a private endeavor? I worry, however, about how the gold price would be effected by such a bank suddenly beginning to accumulate gold and silver. Do you know of this ever being done after the world left the Gold Standard?

 

[ReAmericaNow]

During the era of the gold standard the price was fixed ( lower then market price) by the federal government and it was illegal for citizens to own gold. Actually all citizens had to turn over gold to the FED or suffer a fine. However if we were to have a private endeavor that dealt in the trading of gold, as we had one that dealt in the trading of energy (ENRON) I can’t see any possible problems.

 

[☭proletarian☭]

It wasn't always like that. When the Fed took Americans' gold by force, we saw the beginning of the end for the American economy.

 

[ReAmericaNow]

Hey I am all for ending the fed, I do not think that a private enterprise should have absolute control over the economy. However, the gold standard is not the way as long as you allow for speculation in the markets. That is why the government froze the price of gold, so individuals, businesses and corporations could not profit off of the people.

 

[uscitizen]

Lets go to gold backed currency again, that would mean that we have maybe 1 trillion max available in currency.

 

[Care4all]

I think that is unconstitutional because the federal government has the responsibility of creating one unified currency among the states, no?

 

[uscitizen]

I think that is unconstitutional because the federal government has the responsibility of creating one unified currency among the states, no?

Yeah I think they got that outlawed around 1900 or so.

 

[ReAmericaNow]

Hey a gold standard is a good idea, but we should not engage it until gold returns to its normal price of about $250-$350 per ounce. If we enter into a gold standard before that point, then we truly will become a bankrupted nation.

 

[Valerie]

Here's an interesting site with some good info on this subject:

It should be clear that the point of the government's having the power to print money is to monopolize that power. It would simply not do to allow every man, woman, and organization the right to print dollars, and so the government invariably guards its monopoly jealously. It should be noted that government is never so zealous in suppressing crime as when that crime consists of direct injury to its own sources of revenue, as in tax evasion and counterfeiting of its currency. If counterfeiting of currency were not illegal, the nation's supply of dollars or francs would rise toward infinity very rapidly, and the purchasing power of the currency unit itself would be effectively destroyed.[4]

In recent years an increasing number of economists have understandably become disillusioned by the inflationary record of fiat currencies. They have therefore concluded that leaving the government and its central bank power to fine tune the money supply, but abjuring them to use that power wisely in accordance with various rules, is simply leaving the fox in charge of the proverbial henhouse. They have come to the conclusion that only radical measures can remedy the problem, in essence the problem of the inherent tendency of government to inflate a money supply that it monopolizes and creates. That remedy is no less than the strict separation of money and its supply from the state.

The Case for Genuine Gold Dollar

 

[uscitizen]

As of the end of last year we had over 14 trillion dollars in circulation.

I don't think we have 14 trillion worth of gold to back that with....

 

[ReAmericaNow]

As of the end of last year we had over 14 trillion dollars in circulation.

I don't think we have 14 trillion worth of gold to back that with....

we only have $173 Billion in gold

 

[uscitizen]

As of the end of last year we had over 14 trillion dollars in circulation.

I don't think we have 14 trillion worth of gold to back that with....

we only have $173 Billion in gold

Hmm seem like that going to gold backed dollars would create a problem with massive devaluation of the dollar.

McDonalds would have to start giving change for $1,000 bills.

 

[editec]

I know the States are not allowed to print currency, but is there anything stopping a state from starting a bank dealing with gold and silver stores and issuing gold/silver notes that would be used for transactions like we used to do?

I don't think there's any Federal law against it.

Hell, you get to issue currency in the form of your personal checks, don't you?

In fact I see no reason that any private individual cannot do this if they want.

I don't think you're going to get a lot of customers and I cannot imagine how the business model would work in today's economy, but it is something that seems legal.

Basically you'd run the operation just like gold smiths ran their operations during the middele ages. (they were the first banks, really)

People would pay you to horde their gold for them, and accept script as their reciept for it.

Now if that script is transferable (and if it isn't then it's not script) then you and whomsoever else wanted to play, could issue you own tender, but tender that does not have the same power of LEGAL tender as the FED reserves have.

Now if you really want to play the game right, you'd end up doing what the goldsmiths so often did, too.

You'd figure out what you typical reserves were, and then you'd start issuing script (for youself) beyond the amount of script that you'd have gold on reserves for.

You could play that float forever unless your depositors sensed that there was more script in circulation than gold, then there'd be a rush on your bank by people holding that script to get their gold back.

I strongly advise you to read Galbraithe's book "Money: Whence It Came, Where It Went".

If nothing else it will give you some idea of how what you're suggesting, now, used to be done.

 

[ReAmericaNow]

The $173 billion number is based on a value of gold of $1180/per troy oz. When gold returns to its normal price ($250-350/oz) that gold will only be worth $35 Billion – $50 Billion. The budget for the STATE of California is $102 Billion.

 

[ReAmericaNow]

I know the States are not allowed to print currency, but is there anything stopping a state from starting a bank dealing with gold and silver stores and issuing gold/silver notes that would be used for transactions like we used to do?

I don't think there's any Federal law against it.

Hell, you get to issue currency in the form of your personal checks, don't you?

In fact I see no reason that any private individual cannot do this if they want.

I don't think you're going to get a lot of customers and I cannot imagine how the business model would work in today's economy, but it is something that seems legal.

Basically you'd run the operation just like gold smiths ran their operations during the middele ages. (they were the first banks, really)

People would pay you to horde their gold for them, and accept script as their reciept for it.

Now if that script is transferable (and if it isn't then it's not script) then you and whomsoever else wanted to play, could issue you own tender, but tender that does not have the same power of LEGAL tender as the FED reserves have.

Now if you really want to play the game right, you'd end up doing what the goldsmiths so often did, too.

You'd figure out what you typical reserves were, and then you'd start issuing script (for youself) beyond the amount of script that you'd have gold on reserves for.

You could play that float forever unless your depositors sensed that there was more script in circulation than gold, then there'd be a rush on your bank by people holding that script to get their gold back.

I strongly advise you to read Galbraithe's book "Money: Whence It Came, Where It Went".

If nothing else it will give you some idea of how what you're suggesting, now, used to be done.

There may not be a law but there is that silly old constitution, Refer to Article I, Section 8

 

[☭proletarian☭]

As of the end of last year we had over 14 trillion dollars in circulation.

I don't think we have 14 trillion worth of gold to back that with....

we only have $173 Billion in gold

Hmm seem like that going to gold backed dollars would create a problem with massive devaluation of the dollar.

McDonalds would have to start giving change for $1,000 bills.

Fail.


The 'dollar' would be worth more, since there'd be less bills and they'd actually be backed with something other than lead and uranium.

 

[uscitizen]

we only have $173 Billion in gold

Hmm seem like that going to gold backed dollars would create a problem with massive devaluation of the dollar.

McDonalds would have to start giving change for $1,000 bills.

Fail.


The 'dollar' would be worth more, since there'd be less bills and they'd actually be backed with something other than lead and uranium.

Hmm so we have 14 trillion in paper dollars out there and have 1 trillion or so in gold to back them with but each paper dollar would be worth more if we converted to a gold backed system?

 

[☭proletarian☭]

The dollar is worth so little precisely because they print so many of them.

The value of the dollar is determined (basically) by the value of the goods backing it divided by the number of 'dollars'.


Our dollar is backed by nothing. It's worth nothing. It's accepted at gunpoint and backed by the military only.