At 11:21 AM 1/7/2003 -0500, [EMAIL PROTECTED] wrote:
"Why no talk of $32,567/oz ?" by Jason Hommel http://www.gold-eagle.com/editorials_03/hommel010203.html
Cool! Look at this little snippet:
I derived that exact figure independently using the Fed's 1996 balance sheet -- $11 billion book value at the artificially low price of $42.2222 / oz yields 261 million oz, about 8100 metric tons.... U.S. Gold www.fms.treas.gov/gold/index.html 261 million oz.
Very cool. They can keep consistent books, and I can use a calculator. :-)
Now this here is very grim:
As I suggested, if you start counting all kinds of fractional reserve book money (e.g. M3), the probability of a viable Fed gold standard drops even closer to zero. I was hoping to stick to the more "concrete" money (Adjusted Monetary Base) <http://research.stlouisfed.org/publications/usfd/page2.pdf> .... M3 http://www.federalreserve.gov/releases/h6/Current/ $8.5 Trillion
But maybe that's not possible. The Fed is complicit in the creation of the fractional reserve money, so why should they be let off the hook in redeeming it for gold as well as the printed paper stuff? I really wanted to avoid saying D = M3, but I think I was trying too hard to be nice to the bastards. :-)
So anyway, to Gary North and Lew Rockwell who want to institute a national dollar gold standard, I think we just have to say "get real." The dollar will float all the way down to hell. The gold standard will just have to be gold itself.
And when I say "gold standard," I don't mean some Lawrence Kudlow pablum like "Greenspan pulls levers to keep gold hovering around $350." I mean FULL GUARANTEED REDEMPTION. Nothing less. I mean notes that say "There have been deposited in the U.S. Treasury 20 Dollars in Gold Coin Payable to the Bearer on Demand." The problem we're seeing in this discussion is that under that standard, 20 Dollars is likely to get you about 2 centigrams at the Fed window. Don't sneeze.
-- Patrick
http://fexl.com
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