I get it that gold is insurance against inflation. And, it's real money in an economic catastrophe.
My question is on behalf of the Anons who may have purchased some gold coins (but lost them in the lake). If we paid $1000 for one 1oz coin, and the US goes back to a gold-backed standard and values gold at $35/oz., that is quite a loss! I am not that is what will happen, but I present that scenario as part of the broader question: What would gold need to be valued at in our fiat US$ currency in order to be the backing?
Any Anons have a sense for the future value of a gold coin in the gold-backed dollar scenario? A lot of people have purchased gold coins hoping that they will revalue north of $20K or $50K to accommodate all of the fiat floating around. But I just can't see the elites letting people get "rich" so easily.
If gold were priced at $35 an ounce and everything else were the same. All the gold for sale in the world would be gone within hours. The only way to stop that would be to have a ban on gold. The moment "they" decied the price they have already destroyed the market. In order for a gold standard to work gold cannot have a fixed price. It has to be allowed to find it's natural price... A price that buyers and sellers agree too without outside forces interfering.
The gold standard works, in theory, if they only print money that they have gold to back it with. This is what the US did, and every dollar could be redeemed for its equivalent in gold. In this sense, they didn’t ‘fix’ the price of gold, but the currency perpetually reflected the direct value of gold. The government held the gold in trust and people used notes as a more convenient method of transaction.
This worked perfectly for a century until the banks and the government pulled off a nifty little trick. They took all of the gold (wealth) backing the currency for themselves, and convinced the people that the paper notes on their own had value. And then they printed more of those notes for themselves, and used them to buy up key industries and influence. Fast forward a bit and we find ourselves where we are now.
Gold can have a fixed price. Just make a dollar out of gold, and not paper.
The very nature of capitalism does not allow a "fixed" price. True capitalism is willing buyers and willing sellers agreeing on price without outside (government) interference. Once you allow government interference corruption will follow.
The truth is this. With true capitalism Gold will find it's price. That price will be where the majority of willing buyers and sellers agree.
If we are not living in a debt based economic system it does not matter if gold moves up and down relative to other commodities. If we are living with debt then yes is it very important that the gold price remains fixed or only allowed within a certain band of prices.
Gold could have a fixed price in government currency only as long as it can be freely traded one for the other.
If the countries had a system like that we would be able to trade ANY countries currency for gold. Or any countries currency for any product or service. After all the currency is completely backed by gold.