Posts Tagged ‘gold-backed currency’

A gold-standard 1928 one-dollar bill.

Last week, I heard a prominent alternative financial analyst say the U.S. dollar should be replaced with a new currency backed 15 to 20% by gold, or it wouldn’t fly.

However, prior to the 1933 gold confiscation, the U.S. dollar was backed 35 to 40% by gold, and that didn’t prevent the Great Depression, nor the 5000+ bank failures or one-third contraction of the money supply from 1929 to 1932.

Previously, I wrote the articles, Support for a gold-backed currency crosses the political divide and The gold standard loses its perceived lustre, with major media exposure.

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Dr. Ravi Batra, progressive economist and professor of economics at SMU, stated his support for a partial gold-backed currency as a replacement for the U.S. dollar.

On April 30, 2010, on the Thom Hartmann show, he stated at 57:30:

I don’t know if we will ever have one world currency in my lifetime, but currency should be backed up, partially at least, by gold, so that nobody can just inflate currency to fix the problem and leave workers dry. Wages have been stagnant at the same time, so we need to have some backing for the currency as well, and that should be gold.

The U.S. dollar was on a full gold standard until 1933, when most domestic gold was confiscated and transferred not to the U.S. Treasury, but the illegal Federal Reserve. After the confiscation, the price was raised from $20.67 USD to $35 an ounce. From then until August 15, 1971, the U.S. was on a partial gold standard, with foreign currency directly convertible into gold at the rate of $35 an ounce. Since then, gold has been able to freely float, and has hit all time highs since the economic turbulence of 2008, now over $1200 an ounce.

The call for a return to a gold-backed currency truly crosses the political divide, with a progressive economist singing the praises of a gold standard along with proponents of the libertarian Austrian School of Economics.

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