Fort Knox empty?

N Sperlo wrote: We all trade with a piece of paper. Why is a rock more valuable?

I thought most currency nowadays was electronic.

Unless you're shoving dollar bills or bits of metal down the fiber-optic when you swipe your credit card...

RX Reven' wrote: We just aren’t as smart as we think we are…we keep replacing what works with what sounds good and there will be a price to pay.

Did you hear that somewhere, or just make it up? Reminds me of how Feynman closed appendix F of the Challenger disaster report.

"For a successful technology, reality must take precedence over public relations, for nature cannot be fooled".

I live 10 minutes from the gold vault. If there's no gold in there, they sure as hell spend a lot of money to protect the place.

Also, the only thing I care about on Fort Knox is when we get to autocross on the airfield again The current general put a stop to that several years ago

Nathan JansenvanDoorn wrote: The US dollar has not been gold backed since the 60's. Tempest in a teapot.

The Constitution requires US currency be minted in gold and silver. Article 10: ''No state shall emit bills of credit, make any thing but gold and silver coin a tender in payment of debts, coin money.'' The Founding Fathers knew that irresponsible govts print paper money, backed by nothing, overspend and devalue the currency, causing "inflation", and destroying the economy. That has been happening for decades and is accelerating at a tremendous rate NOW. When the govt began issuing paper money it was backed by real gold and silver. In 1913, the Federal Reserve System was created by Congress; a private company, owned by member banks, and controlled by the bankers. The bank notes were redeemable for gold/silver.

In 1933, FDR stopped the minting of gold coins and paper money was no longer backed by and redeemable for - gold. You couldn't even own gold, that was illegal. You had to return it to the Treasury for paper money. But "collectors" could keep their gold coins. But they were no longer usable currency...just like you can't go in a store today and buy bread with a gold coin! Federal Reserve Notes are not backed by, or redeemable for gold/silver.

The mint made silver coins through '64, then reduced the silver content to 50%, and then finally in 1970 silver coins ceased. This was due to inflation (we were warned it could happen by Thomas Jefferson, see first paragraph). In 1971, the govt ceased allowing foreign banks to redeem US dollars for gold. This was when the gold standard ceased.

aussiesmg wrote: Australia eliminated the 1 cent coin years ago, then the 2 cent, now everything rounds off to the 5 cent, or nickel for you yanks. The 1 dollar and 2 dollar notes are now coins

In US currency the nickel is physically too large for its value, and should be eliminated also. Dimes, or possibly quarters, should be the lowest currency denomination.

But replacing all $1 notes with coins...What about all those young women 'working' their way through college? Do you really want to deprive them of an education??

Everyone in this thread needs to watch "The Secret of Oz."

Kenny_McCormic wrote: "For a successful technology, reality must take precedence over public relations, for nature cannot be fooled".

I love(d) that guy. Brilliant, funny, and completely devoid of bullE36 M3.

I have to go re-read some of his stuff.

Kenny_McCormic wrote:

RX Reven' wrote: We just aren’t as smart as we think we are…we keep replacing what works with what sounds good and there will be a price to pay.

Did you hear that somewhere, or just make it up?

It's a quote from Thomas Sowell...here's another one of his that I like:

It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.

wbjones wrote: The Constitution requires US currency be minted in gold and silver. Article 10: ''No state shall emit bills of credit, make any thing but gold and silver coin a tender in payment of debts, coin money.''

Funny think about that- there's no Article 10, The last article is Article 7. And even more interesting, reading a transcript of the Constitution. What you are posting is Article 1, Section 10, which reads in full:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Which basically restricts the states, and in this reference, they are not allowed to pcoin money, nor are states allowed to "make anything but gold and silver coin a tender in Payments of Debts"- which isn't really saying that money is required to be backed by gold or silver, but that the states can only pay debt via gold and silver.

But that is a small part of what the states are not allowed to do.

No mention of the word "currency" so it does not appear that the consitution weighs in on the idea that currency needs to be backed by anything.

The Founding Fathers knew that irresponsible govts print paper money, backed by nothing, overspend and devalue the currency, causing "inflation", and destroying the economy. That has been happening for decades and is accelerating at a tremendous rate NOW

Show me this wild inflation please. If the government is lying, please refer to the independent BPI, the Billion Price Index. I'm tired of Ron Paul claiming for the past 6 or so years that rampant inflation is less than two years away. In the current situation, printing vast amounts of money was predicted based on a Keynesian model to not increase inflation, and it didn't.

Also gold is dumb as currency, constitution or not. Why Not the Gold Standard? Also how is gold backed by anything other than faith? It is a faily useless metal, all things considered.

I've seen people who back the gold standard say, "We have to get our money supply out of the hands of bankers." I fail to see why commodities traders would do any better.

http://www.npr.org/blogs/money/2011/04/27/135604828/why-we-left-the-gold-standard

I find NPR's Planet Money podcast incredibly informative.

We left the gold standard because it made our currency unstable. The truth is that fiat currencies are more stable.

I heard all the gold from fort knox went into Mr. T's gold chains......all of it we had.

alfadriver wrote: ......No mention of the word "currency" so it does not appear that the consitution weighs in on the idea that currency needs to be backed by anything.

Hey now! Don't let facts get in the way of a perfectly good argument.

aircooled wrote:

alfadriver wrote: ......No mention of the word "currency" so it does not appear that the consitution weighs in on the idea that currency needs to be backed by anything.

Hey now! Don't let facts get in the way of a perfectly good argument.

I love it! It never gets old!

I support a ham based currency.

logdog wrote: I support a ham based currency.

Bacon....aaaaghhh

I would love a wallet full of bacon.

fritzsch wrote: Also how is gold backed by anything other than faith? It is a faily useless metal, all things considered.

Historically speaking, gold is easy to spot, easily formed into different shapes, and won't corrode away while it sits in your storage room.

Those last two are why it makes such great conductors for electronics.

chandlerGTi wrote:

logdog wrote: I support a ham based currency.

Bacon....aaaaghhh

Women are like bacon…they smell great, taste wonderful, and kill you slowly.

Alan Cesar wrote: http://www.npr.org/blogs/money/2011/04/27/135604828/why-we-left-the-gold-standard I find NPR's Planet Money podcast incredibly informative. We left the gold standard because it made our currency unstable. The truth is that fiat currencies are more stable.

Planet Money is a very informative and honest broadcast. It's also typically devoid of bias. A bold statement I know but I'll stand by it.

What year did we go off the gold standard? How did going full fiat make us more stable?

I just shipped a bunch of storage units to Fort Knox. I guess they aren't using them for Gold!

Dr. Hess wrote: What year did we go off the gold standard? How did going full fiat make us more stable?

LOL.

Well, see, before we went off the gold standard, the CPI would go up a little, then down a little. Kinda unstable, see? But since we left the gold standard, the CPI has been rising steadily. The slope of that curve is steep, and very stable.

In reply to Dr. Hess:

Ok, doc, I'll bite. So not knowing much about where to get data, I googlefu'd "Consumer Price Index History" which brought me quickly to this page- http://www.bls.gov/cpi/ Seems pretty credible, although data is only there back until 1913 and not back to the revolution. I'm guessing the "estimate" part of your graph is going back the additional 100 years.

But the raw data is available to anyone in a basic text file- ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

Pretty cool. So I plot that up, and it's pretty close to what you have.

Seems to be a good match. But stability isn't about the basic graph, it's about the change, or the first derivative of that graph. Or in a more basic explanation, how does the CPI change from year to year. That data is also available, and I plotted that up:

I may be missing something, but the data is pretty darned noisy up until 1960, and then again in the late 70's, early 80's. But for the most part, after 1970, the rate of change of CPI is pretty consistent, and actually has slowed down in the last decade.

Basically, if you look JUST at the CPI data, the information you see is very, very misleading, you must look deeper and see the change in the data to see actual stability.

So if you are trying to tell a story that the paper standard is bad, go ahead and look at the partial info, but if you want to see the instability of the gold standard, check the stability of the data.

BTW, doc- where did YOU get your data? Shape may be what mine is, but your scale is odd. Cite your source. I did.

Have fun.