Kemp knows what will happengreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Jack Kemp has written a major letter to Clinton, asking him to put us back on a gold standard and fix-rate the dollar because of Y2k. This is a significant development because there is a gold grab going on right now. It is also significant to us for other reasons.
Kemp has cited Y2k as the reason that floating currencies will no longer work (not that they do now anyway). Floating currencies take a world-wide network of main frame boxes to calculate the rates and transactions on a daily basis. It can't be done just in the US. Kemp believes that even if the US banking system is fully compliant, non-compliant systems in other countries render floating currency trading impossible. It can't be done. You can't get there from here!
The system will come down even if non-compliant boxes are banned from the network because there will be no trading with those countries. Gulp.
An excerpt so you can get the drift:
************************ With the stroke of your pen you can, temporarily at least, restore the simplicity of the Bretton Woods monetary system as an insurance policy against disruptions and guarantee a stable dollar throughout the Y2K window of vulnerability. Therefore, I want to urge you to issue an executive order immediately to stabilize the value of the dollar by instructing the Fed to conduct open market operations to add and subtract liquidity to keep the price of gold temporarily within a narrow band around the average gold price of the past 12 months. There would be no need of an international conference to discuss this. You need only fix the dollar/gold price as we did under Bretton Woods, and every country in the world could fix to the dollar. **********************
If you are not following gold news, the British are grabbing it right now, selling off central bank of London gold at low prices to their banking cronies like the Warburgs, et al. The left hand is feeding the right. This is partly why Kemp is pleading with the president to step in. He - Clinton - won't.
Not unrelated (I believe) is the British MoD plan to put 2000 special forces in the financial district and airports of London (and other large cities) by September. Reason given: Y2k (starting with The Nines, they claim). Other reason? Gold grab will escalate in the fall. Other reason? Collapse of the entire banking system/stock market by fall? Reasons for that? The derivitives bubble is now at $150 trillion and gamblers' haven hedge funds like LTCM and Tiger are still major problems that could take down the system overnight.
One perturbation and it's over. Y2k? The ultimate perturbation.
We could be seeing the beginning stages of a gold war, and Y2k is right in the middle of it. Floating currency gambling schemes and gold short schemes won't be able to continue much longer, and with a $150 trillion bubble of debt, guess what? Badda bing, badda bang.
Wonder why Jack Kemp is worried? This could be the end of our system. If Clinton ignores him, the chances of that are even greater. Clinton will ignore him (my bet) because he's way deep into puppetry, from the dangling end. The danglers? Look at who's grabbing the gold.
-- mark (firstname.lastname@example.org), July 29, 1999
I read Kemp's letter - it was very interesting.
What price do you think they would peg gold at, and why?
What do you think the benefits of a gold standard would be? The drawbacks?
Would a gold standard make a difference in the price of goods? (I'm thinking that the price of gasoline will go up in a crisis, whether or not there is a gold standard).
Would the price of gold be pegged only to the US dollar? What about other currencies? Would they be pegged to gold, or to the US dollar? How will they calculate their values if the computers went down?
Just curious. I'd like to get other people's opinions.
-- Clyde (email@example.com), July 29, 1999.
I too would like some other opinions. I want to bring this down to me and mine level. Does this mean I should be converting all of my cash to gold, or gold to cash, or just sit tight with a little of each? Hannah
-- Hannah (Hannah@Colonial America.com), July 29, 1999.
This was posted on garynorth.com this morning and written by Alan Greenspan in 1967. I think it answers the question regarding the discipline of a gold standard on restraining excessive credit growth and on controlling inflation.
-- Bill P (firstname.lastname@example.org), July 29, 1999.
Greenspan on Gold Standard - 1967
Sorry, I forgot to hyperlink when I cut and pasted URL.
-- Bill P (email@example.com), July 29, 1999.
Wow, that's a brutal indictment of floating rates.
Of course, he was my age when he wrote it. I'd hate for someone to show me something 32 years from now that I wrote today.
-- nothere nothere (firstname.lastname@example.org), July 29, 1999.
>Therefore, I want to urge you to issue an executive order immediately to stabilize the value of the dollar by instructing the Fed to conduct open market operations to add and subtract liquidity to keep the price of gold temporarily within a narrow band around the average gold price of the past 12 months.
Mark - it would appear from the above quote from Kemp's letter that his idea, while seemingly a good idea, would in fact allow anyone, any foreign country, any foreign business, any foreign bond holder to demand either all or a percentage of their paper money in the form of US gold - thereby relieving the US of any need for Ft. Knox in short order I would assume. Remember that the US went off the gold standard _because the world had been flooded with paper dollars during the Vietnam years and with those dollars being redemed for what was eventually 12,000 tons of US gold, Nixon decided to unilaterally default by going off of the gold standard of the Breton Wood agreement.
My question to you and to Bill P, since you both have a long term interest in this subject is this - why would we want to peg the POG to the last 12 month average? The POG has been for some time "artificially" manipulated by the paper gold trade, there is an ongoing international "shortage" of the metal, yet the POG remains low due to the hedge funds, CBs, and gold mines each playing pocket pool. I have seen figures that the POG without that "manipulation" would be anywhere from $600 - $30,000, depending upon the particular analyst's basis on which the figures are derived - ie, 500 year averages up to the guesstamated ratio of total printed US$ worldwide+electronic$ to total US treasury gold ounces.
Is it possible to go back to a gold standard such as the USA once had, where the paper money is refundable in a fixed amount of gold? Isn't that the same as defaulting upon our debt? What good would it do to peg the US$ to gold if the two weren't convertable upon demand by the holder? Isn't Kemp's idea just a means to empty Ft. Knox and default upon our intl debt?
Obviously _something needs to be done, but is it within anyone's means to do? Depressions are the tried and true means of shedding debt by the method of deflation (going on quite strong world-wide & stronger if/when China devaules its yuan).
Within any currency system, when debased currency is added by the "mint" to the general circulation it will _always_ supplant the non- debased currency pieces in circulation. The user population will perceive the non-debased pieces, rightly, as more valuable and will withhold those pieces from circulation. Pres. Roosevelt did the only thing he _could have done in light of changing the number of US$ to an oz. of gold from a lower number to a higher number, he _had to take the legitimate gold coinage out of circulation in order that people not be tempted to deflate the "new" currency by demanding the new paper with an oz of gold. By this means he was able to inflate the US$ without the spectre of immediate deflation by profit taking citizens - which would have ruined his domestic make-work programs. And incidently, more interesting in light of the recent revelations re the London gold sales, Roosevelt's action surely must have created a situation in which US goods looked like a good deal to foreign holders of gold, suddenly they had approx $15 more buying power - if they were willing to sell their gold for US$ in order to participate in the US economical structure - (or the more complex structures of countries working with the BOE with the result that the BOE would then release lines of debit/credit - not cash - for use to purchase the newly cheaper US goods).
Nowadays, hedge funds, and the currency desks the big banks, CBs, and soverign treasuries all play this little game with each other. Rampant electronic inflation, gold leasing, hedging, derivitives - all computerized spin-offs of what what initially the BOE's decision to float the currency from the pound Sterling. Remember that the BOE was vociferous for nearly 50 years in agitating the US Treasury to float the US$ from gold.
The current players and _we_, the ultimate payers and pawns in this scheme, are nearing the time to pay the piper. Wealth gets transfered during depressions.
Use gold as a wealth conserver, not as a wealth generating device these days.
Plastic money is a very debased monitary unit, completely unable to stand upon its own - yet will remain in total powerful use until the means by which its creators and sustainers create, maintain "value", and track it's facilitated transactions fails.
-- Mitchell Barnes (email@example.com), July 29, 1999.