There have been many disparagers of the Federal Reserve and its control over the currency recently and there are also many Gold-Bugs in commodity land touting buying gold. I was wondering actually how any return to a non-fiat currency would take place. The US economy’s GDP released on Friday is approximately $14.872 billion according to the Bureau of Economic Analysis site. This was a sharp upward revision to a growth rate of 3.1 and knocked down commodity prices, including gold. Many of the Gold-Bug people decry the “fiat money” and the Federal Reserve, and would like to get rid of the Fed and return to a Gold Standard or a hard money standard. But, all the gold in Fort Knox, if allowed to underpin the dollar at current market values, would cover about 1.5% of the needs of the US economy. . . . → Read More: For all the gold in Fort Knox
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Hat tip to Naked Capitalism which pointed me to Credit Writedowns for this: From the WikiLeaks cables as published in the Guardian today regarding a meeting with the US Ambassador to the United Kingdom and the Bank of England Governor Mervyn King on 17 Mar 2008: Systemic Insolvency Is Now The Problem ————————————– 2. (C/NF) King said that liquidity is necessary but not . . . → Read More: Systemic insolvency is the problem – as said Mervyn King in 2008 The US has (to mix a few metaphors) shot itself in the foot by building large speed bumps to exports. These things are by no means fore-ordained. The US could, with an adjustment of its tax policies change to more export growth. But the current administration has decided, contrary to its stated campaign promises, instead to carp at others, whine, and continue increase its anti-export tax treatment of overseas Americans and foreign investors. . . . → Read More: Geithner’s chiding of others should lead to export friendly tax reform here |
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