How to Profit from Gold (End the Fed)(Gold Standard)

The Gold Reserve Act of 1934 prohibited private ownership of Gold and non public ownership. Gold could only be used for industrial purposes. The Gold Reserve Act of 1934 assured a fixed weight of Gold at 13.71 grains equal to one dollar or $35 an ounce. This gold standard for the dollar stuck between the years 1934-1971. In 1971, Nixon raised the price to $38 and again in 1973 to $42.22.

Gold, Oil and Inflation affects the value of the dollar. There is not enough gold in the world to serve as the medium of exchange in international trade. The most popular currency for international exchange has been the dollar. The dollar is the leading currency. The dollar is the international currency for pricing and payment of commodities.

President Nixon eliminated the 25% gold backing for Federal Reserve deposits. As soon as the dollar currency lost its gold backing, it became a commodity. The dollar as a commodity can be bought and sold on the market in response to world anxieties. The result of the dollar moving away from gold backing was a floating exchange rate that often invited over-speculation in foreign currencies. Banks could go broke from a price movement in the wrong direction. Supply and demand drove the exchange in relationship to other foreign currencies.

Inflation occurs as the money supply increases faster than the output or Gross Domestic Product, the sum of a products and services in the U.S. When government spends more than it brings in taxes is causes a budget deficit. To easy monetary pressure, the Federal Reserve increased the money supply by printing more money. The increase in money supply caused prices to elevate higher as the buying power of the dollar topples and dropped. Inflation in turn caused labor wages to go higher and corporations to raise prices as their profit margins drop. Higher oil prices cause inflationary forces on prices. High oil prices signify an energy crisis. High energy prices caused by political and global disruptions drives oil prices higher and causes securities to devalue. Historically, oil money from the Middle East went into U.S Treasury Securities. However, realizing the trends caused by inflation as it related to securities valuations, Arab money managers shifted into buying Gold. Gold became the commodity to provide valuation stability. So, demand for gold increases as shortages of commodities like fuel and food become greater. In shortages and military oppression, Gold is used to buy freedom.

Category:

Science & Technology

Tags:

• gold
• oil
• dollar
• silver
• currency
• fed
• bernake
• ron
• paul
• rothbard
• banks
• confidence
• game
• europe
• japan
• italy
• spain
• ecb
• bonds
• swaps
• real
• estate
• china
• brazil
• emerging
• markets
• indonesia
• taiwan
• thailand
• socialism
• keynesian
• milton
• friedman

[davepamn]

Gold maintains it’s originally value against the force of inflation. The gold cover clause states that a portion of the U.S treasury amount must be covered by gold in terms of dollar amounts not ounces. Gold value increases as price increases offset the inflationary affect.

[davepamn]

If I had money, I would buy gold immediately like all the other rich people. How did the rich know that the gold standard was correct? The wisdom of the crowds provides the immediate solutions. It took me alot of research to realize gold accumulation during inflation makes sense.

[davepamn]

Rhe wealthy buy gold as a means to escape State spending. Governments don't produce wealth, they consume wealth. The wealthy never departed from the gold standard. They buy and sell bonds like gold. However, if government spending goes out of control, they buy gold like a central bank.

[davepamn]

the store 260 million ounces of gold with the us treasury and every ounce is guaranteed to be returned on surrender. central banks buy gold and act as if they never went off the gold standard. the wealthy buy gold as a protest of state capitalism devaluing the currency