Decoupling the dollar from precious metals essentially relegated those metals to commodity status. Their currency value is no longer valid. Before FDR, the dollar was supported -- and limited -- by the value of gold. Now the value of gold rockets up and down based on speculation and the Fed's willingness to print more paper money. Since FDR, the spot price for gold has hip-hopped up and down, but the current value of one American dollar has gone down steadily, sometimes faster and sometimes slower, but always down. (Can you hear those printing presses?)

I'm afraid recoupling the dollar to gold and/or silver would be just about impossible now. The US money supply has outstripped the actual wealth that backs it up by many multiples because the government routinely prints paper money to pay its bills. Recoupling the dollar to metals would require a currency devaluation so extreme that it would probably collapse the dollar, at least on international markets.

I would love to see a chain of stores refuse to accept "federal reserve notes" and accept ONLY U.S. minted gold and silver coins at the prevailing daily spot price.

An observation: It seems that gold and silver are not the only metals that are in demand ............. rhodium, platinum, and other rare earth metals are now being hoarded by governments. On the local scene, we are witnessing thefts of metal from housing developments and abandoned houses.

It sort of makes me wonder ..................... why all the fuss over metals? When it comes to life's realities, you can't eat metals. IMO, having a good stock of survival supplies has more value than hoarding metals. The commodities of water, dry or freeze-dried packaged foods, emergency medical supplies, emergency electric power and protective firearms are of more importance to me. When people are desperate, how much of their metalic wealth would they pay for survival commodities?

Quote from: AmericanFlyer on November 28, 2010, 05:12:32 PM
Billy, there are many, many "ma and pa" stores around the country who accept silver coins as payment for goods, and honor whatever the spot price for gold or silver is that particular day.

The chief reason why this country ceased making "common" 90% silver coins in 1965 (except for the 40% silver Kennedy silver half dollar from 1965-70) is that the U.S. Mint was having a difficult time procuring enough silver to mint the coins. 

Also, there are not anywhere close to "billions" of silver coins floating around out there.  Quite a bit has gotten melted down over the years, especially since the industrial demand for silver has skyrocketed since the 1960s.

The chief difficulty with the United States returning to a gold standard is that there is presently not enough gold inventory available in the ENTIRE WORLD to support it.  As it is now, The U.S. Mint is having a very difficult time fulfilling their gold coin minting requirements and orders due to the shortage of gold blanks.

The U.S. Mint still produces .999% silver dollars, 90% silver commemoratives, and 90% silver half-dollars, quarters, and dimes (as part of yearly proof sets).  And once again, the U.S. Mint has been having problems with supply, this time with silver blanks.

A hybrid gold/silver standard is possible, but it would be difficult.

I am avid collector of all types of coins since I was like 7 years old and a great proponent of the Gold standard. I recall when Pres Reagan mandated that Americans could own gold again and the Mint began selling off US gold reserves  fort Knox, few know that this is how a lot of our debt was paid.


As a collector, I think there are more coins out there than is generally beleived and not as many of them were melted, a lot may have been taken out of the country by the Japanese, Middle east types though.

People also forget that the price of silver (and gold) is tied in with the price of production. IT COSTS MONEY to mine, process and transport Gold and Silver to where it can be minted. The price of gas, machinery and labour costs has a lot to do with it.

Billy

Quote from: bama_beau_redux on November 28, 2010, 09:38:23 PM
Spot price measured in what?

Euros, of course. Now there's a hottie on the currency market!

Quote from: BILLY-bONNEY on November 28, 2010, 09:17:01 PM
I am avid collector of all types of coins since I was like 7 years old and a great proponent of the Gold standard. I recall when Pres Reagan mandated that Americans could own gold again and the Mint began selling off US gold reserves  fort Knox, few know that this is how a lot of our debt was paid.


As a collector, I think there are more coins out there than is generally beleived and not as many of them were melted, a lot may have been taken out of the country by the Japanese, Middle east types though.

People also forget that the price of silver (and gold) is tied in with the price of production. IT COSTS MONEY to mine, process and transport Gold and Silver to where it can be minted. The price of gas, machinery and labour costs has a lot to do with it.

Billy

I am also a collector of graded coins, Billy, and I have been heavily involved in the gold and silver market for about three years now.  That's what great about this forum.  Everybody has experience in many areas of expertise, and it makes for interesting conversation.

Silver in particular is a very difficult metal to extract and process.  Silver also has many industrial applications.  Gold, on the other hand, is more of a TRUE "precious" metal.  Gold has always been mostly a measure of wealth.

Quote from: surfer_squirrel on November 28, 2010, 09:01:42 PM
An observation: It seems that gold and silver are not the only metals that are in demand ............. rhodium, platinum, and other rare earth metals are now being hoarded by governments. On the local scene, we are witnessing thefts of metal from housing developments and abandoned houses.

It sort of makes me wonder ..................... why all the fuss over metals? When it comes to life's realities, you can't eat metals. IMO, having a good stock of survival supplies has more value than hoarding metals. The commodities of water, dry or freeze-dried packaged foods, emergency medical supplies, emergency electric power and protective firearms are of more importance to me. When people are desperate, how much of their metalic wealth would they pay for survival commodities?

Surfer, you nailed it.  You can't eat gold and silver and platinum and copper and zinc and nickel.  When it comes right down to it, when the shit hits the fan the basics (food, water, shelter, safety) are much more valuable. 

However, a "bartering system" is only a short term solution, and eventually a monetary system must be established.  So having some silver and maybe a little gold stashed away is a good idea.

Quote from: bama_beau_redux on November 28, 2010, 09:38:23 PM
Spot price measured in what?

Um, how about the daily spot price on the commodities exchange.  Ever heard of that?  If not, look it up, Bama. 

Quote from: AmericanFlyer on November 29, 2010, 08:41:21 AM
I am also a collector of graded coins, Billy, and I have been heavily involved in the gold and silver market for about three years now.  That's what great about this forum.  Everybody has experience in many areas of expertise, and it makes for interesting conversation.

Silver in particular is a very difficult metal to extract and process.  Silver also has many industrial applications.  Gold, on the other hand, is more of a TRUE "precious" metal.  Gold has always been mostly a measure of wealth.

Ah a fellow numismatist!

you are Correct about gold, it should also be noted that in many parts of the world I have been gold is often used in every day transactions. From the mountains of Northern Thailand to Indonesia, people barter gold for other goods, lots of people wear gold and have chains that can be used to break off a certain amount to use as barter for rice, livestock etc.

These are people who don't use banks and if they have any extra money they buy a gold chain or whatever. If they are in the city and need cash they hock it.

At one time Al Quieda was offering new recruits fifty grams of gold to fight the Americans in Ghanny.

Makes you think

50 grams is 6+grams shy of 2.0 ounces which would be about $3,000.00 US.  :o

Quote from: BILLY-bONNEY on November 29, 2010, 09:13:44 PM

Ah a fellow numismatist!

Oh, THAT's what you guys are. I had this weird feeling you were coin collectors...

Yes sir, numismatics is a very interesting hobby.  My only advice is to stick with coins graded by PCGS and NGC.  All other coin graders are at least one tier lower than those two.

I'm mostly into silver bullion right now.  Not doing any "collectible" coin buying right now.