Yes! We're #1!

The point I was trying to make is that, while the writers disagree on why it happened and whos' fault, if any, it was, what they have in common is that they all describe the same set of conditions. I see the same conditions today. What does that mean? I'm not making any claims.

I'll read it for sure. I'll take anything I can find. I confess my interest is not so much the why and how of what happened. I'll leave that to historians and economists. I'm interested in WHAT happened. How the average man made out. Who got hurt, who made out well. How did folks cope. Who ate, who starved.

If nothing happens then I'm just a small tad more knowledgable about history. If we get a rerun, maybe I'll know how to weather it.

I realize you hang out on the metalworking group. I do too but only as a reader. I haven't yet figured out how you make a precision turning with only a twenty pound sledge - or something like that - but I've got the sledge and I'm working on it. I'm too dumb on the subject to do anything but read and try to learn.

I'm on misc.survivalism and my interest is how to cope IF. How to prepare in advance is a bonus. For now I'm going to assume we are toast and hope I'm wrong.

must be "great" to live in a society so ummm , diverse ... and ahhhh , offering such varied employment prospects ..

LOL Trying to put a positive spin on life in the US ... aint easy

I don't like sow's ear sandwiches. Wouldn't it be easier to unite on that?

The british army? The one the US easily beat with poorly equipped and fed farmers?

And now that you've both had full frontal lobotomies, you spend all day making fools of yourself on Usenet.

You just need to put more antifreeze in their food.

They didn't leave the 'u', they added it to further corrupt their own language. After all, they are too impotent to do anything useful in this world.

(snips -- you might consider admitting when you snip -- it makes your posts more honest)

So long as their gold-based securities were honestly represented as being worth X amount of gold, and they actually HAD that gold in storage, there was no reason whatsoever to be concerned about any such depletion. What possible difference could there have been between storing gold which was obtained by issuing gold certificates, and paying out that gold when the certificates were presented for redemption? Given the costs of storage, they were better off paying out the gold than continuing to store it. Having issued the gold certificates, it really wasn't their gold anyway.

Such a treasury would have had two categories of precious metals: those which the treasury owned free and clear, which were not subject to redemption in any case; and those which the treasury held as security for the gold or silver certificates it had issued, which were subject to redemption

-- such redemption not representing a net loss to the treasury anyway.

So long as that paper was a promise to pay out X amount of metal, that was impossible.

You indicate a lack of understanding of what a gold or silver standard really is. It is NOT a promise to pay out gold or silver for paper money at some price which may or may not be the price that gold or silver is fetching in the marketplace in said paper money at the time. It is, instead, a promise to pay out gold or silver at a fixed price, the paper money being, in fact, gold or silver certificates (in effect warehouse certificates) entitling the possessor to redeem them for that fixed amount of gold or silver. There is no separate price of the metallic standard other than the amount promised to the possessor of the paper. A gold certificate which promised to pay out .9675 ounce of gold (as a $20 gold certificate did) was worth .9675 of an ounce of gold -- exactly -- no more and no less. And .9675 ounce of gold was worth $20 -- exactly -- no more and no less. Asking what the price of gold was in a gold standard is like asking what the price of Federal Reserve Notes is in the current U.S. fiat money system -- completely meaningless. "How many dollars is a $20 note worth?" Uh, $20...

(The rest, being an appeal to authority based on the opinions held by the majority of economists, snipped.)

-- Robert Sturgeon Alcohol, Tobacco & Firearms should be a convenience store, not a government agency.

This is, after all, the land of opportunity. Of course no such thing would be allowed in Australia...

-- Ed Huntress

ROTFL ...

ed , you are good value how do you think US servicemen get laid in Aus ?

folk just feel a load of pity/revulsion for anyone reduced to servicing yanks as a way to get money ...

Doesn't do anything about the population problem! . .

We could make it a requrement to eat one a week.

There are big differences. For one thing, we have more experience at dealing with trouble. That doesn't mean that the Fed or economists or Congress could fix everything that might happen, but the runaway situations -- inflation, contraction of the money supply, and so on -- are a lot less likely because they get stopped early on. The people in power recognize these situations earlier in the cycle, and they have a few tools to deal with them.

I'm not so sanguine about all of it as it may appear, but it seems I spend most of my time arguing against paranoia regarding the economy. If we have a crisis, I don't believe that it will be policy that will cause it, or deepen it, as it did in the 1930s. It will happen because of real economic factors rather than because of the currency manipulations or fiscal or monetary policies. That's just my opinion, and it's little more than crystal-ball gazing. But it's based on what's actually happened since, say, 1980, when my confidence returned that there are tools that can be applied to correct many economic policy problems.

The people who had a lot of money at the beginning of it made out well. The rest did not. d8-) I'm talking about actual money in the bank, not about one's worth in terms of stock holdings held on margin.

Reading and learning isn't bad. Getting your hands into it and learning by doing is a lot better.

As a former Boy Scout, I'm all for being prepared. I just try to draw the line between useful preparation and paranoid excess, and it's probably not in a range that most members of misc.survivalism would agree with.

-- Ed Huntress

The difference is that you have nothing to take yourself seriously about, Myal. You are an impotent and useless cipher living in a country that is a useless and inconsequential cipher. What do you have to be serious about, after all?

I don't disagree with your lack of seriousness. It's appropriate to your situation.

-- Ed Huntress

The world has never worked that way. There is a whole arbitrage situations involved: If a country has poor productivity, their currency (and their gold) is worth less than that of another country that has good productivity. That will result in a run on their gold, which is the process by which equilibrium is restored. The gold, converted into other currencies, is worth slightly more than it was under the original currency, in terms of the relative currency values.

The lag in re-establishing equilibrium may be very short -- hours, in today's trading environment. But that's what arbitrage is all about: playing the lags in re-establishing equilibriums. People get very, very rich that way, whether the unit of exchange is dollars, pounds, or gold.

And there are many other kinds of speculations. There are instruments by which the currency put in circulation may be backed 100% by gold -- today -- but can result in a large runup of currency tomorrow, and there won't be enough gold to back it. Lines of credit are one such example. The average currency outstanding may be backed by gold but a lot of people drawing on their lines of credit at the same time can result in a gold shortfall. And, if you didn't have lines of credit for working capital, there wouldn't be much business going on anywhere. There is plenty of gold to back every dollar of the currency put in circulation by lines of credit *as long as the economy is stable*.

Jay Gould, who cornered the gold market and drove it up by nearly 1000% in one day, did it just by drawing down gold reserves to the point where he caused a panic. Because of the vaguaries in how much currency really is in circulation, given the banking methods that have been in place since the

18th century, it's not hard, if you have a lot of money, to manipulate confidence in a currency, even when, given another day or two, the banks could supply the gold. If it wasn't for Rothschild pumping in short-term gold, the Bank of England would have collapsed once in the 19th century, and the US dollar would have collapsed twice, because of a crisis caused by the short-term lag.

If you have a banking system and if your currency is backed 100% by gold, that doesn't mean that every bank in the system always has exactly 100% of the gold necessary to cover its liabilities 100% of the time. It can get the gold, maybe in a few days, or, if it has to travel across an ocean, maybe in a few weeks. But holders of bank deposits can panic plenty in a few weeks. They are not imaginary players in a game of currency exchange. They're real people who react to fears.

So, even ignoring some of the mechanics of intentional panics, such as the ones Jay Gould used to create, you have a lag in the system that works at the level of arbitrage, even with perfectly rational players, and you have lags that work to create fear and panic. All in all, the gold standard creates a lot of such problems, and the numerous runs on gold during the

19th century testify to the fact that even a secure bank, like the Bank of England was then, is vulnerable to them. In today's trading environment, it probably would be a matter of daily attacks on gold reserves and daily panics.

But what contribution to the economy would the "free and clear" reserves make? You'd have a store of capital that was sitting on its ass. You'd have the economy of the Middle Ages.

People don't live on promises. They want their gold, now.

Robert, I studied economics at some length, a few decades ago. The situation with gold hasn't changed. If your "understanding" was recognized by reputable economists, you'd be in the majority of opinion.

But you are in an extreme minority. The gold bugs make up a very small portion of credible economists, for reasons of experience with gold and experience with the consequences.

In that light it's interesting to note that, during the Great Depression, the countries that got out of the depression first were the ones that abandoned the gold standard first (the UK, in 1931). The ones that got out of it last were the ones that were last to abandon the gold standard (the US).

Gold doesn't have a lot to do with the world economy today. It's just a unit of exchange, as the dollar has been a unit of exchange since the Bretton Woods agreement. There's nothing magical about it, and there's nothing intrinsically valuable about it. When the Babylonians started the use of gold for money, it was only as a convenient token of exchange, being denominated in bushels of wheat. And that's all it is.

-- Ed Huntress

You won against 3rd rate garrison troops in 1776, In 1812 you fought our 2nd rate troops and lost, since 1776 the Yanks have not won any wars of consequence.

A real history buff, I see. Sometimes I wonder if it made sense to fight the Japanense in Burma or the Germans in Europe. You'd probably have a better education if we'd let them beat you. And I'll bet that you could goose-step really well, given a chance.

-- Ed Huntress

My idea is way better than that! . .