Hello Ganalane

That's a lot of "ifs", what if the COMEX failed to deliver? Yes, maybe we will need to go back to the horse and buggy the way the North American car industry is heading.

To get back on topic, I assume you have heard of the gold franc. This was a form of the gold standard. It was the unit used for the Bank of International Settlements (BIS) until 2003, valued at 0.29g gold. Coincidentally this was close to the time gold started it's present bull market. In 2003 the gold franc was replaced with the Special Drawing Right (SDR). The excuse used for replacing the gold franc with the SDR was that gold and dollars had limitations as the only way of settling international accounts, note the dollar was named along with gold so that it would not be construed that gold was again receiving special treatment. Suggest you read about the Bretton Woods System and how the BIS monitored international capital flows. Of course, they had to get rid of the Bretton Woods System as well, as this was greatly reducing their ability to print fiat money. Once Bretton Woods was gone the big investment banks of the day (Lehmans/BS/City/ JPM/BOA/big european banks etc.) were then able to leverage up in many cases in the range between 40 & 60 to 1. From what I can remember under the Bretton Woods Accord leverage was around 12 to 1.

In light of the above, perhaps you can explain to me why printing all this fiat money has not increased trade as it was designed to do, but instead has greatly reduced it. Another indicator of world trade is the Baltic Dry Index which has posted it's lowest levels in years.

The gold standard/gold franc kept the bankers in check.

How would a gold standard work? Of course there is not enough gold in the world to cover the present amount of currency in circulation now on the order of trillions. You mention that some inflation is good and I agree that there is little harm in some inflation , but I disagree with printing trillions of dollars which can only end with high inflation destroying the wealth of people who work hard and save. A system is already in place to handle a form of the gold standard, it's called the BIS. Currency in circulation only requires to be backed by a small percentage of gold, not 100%. Fiat currency is created by a key stroke on a computer, with gold you have to dig it out of the ground, mine and process it. You would soon see a decrease in war mongering when they had to pay in real money. What concerns me the most is how and why all forms of the gold standard were systematically removed and the subsequent brain washing of the populace that gold is not money. JMO

Below is the link for the central banks' agreement, of interest is that the U.S. Federal Reserve is not listed. It is my understanding that this agreement has been updated.

bc

http://www.reserveasset.gold.org/cen...

The Central Bank Gold Agreement (CBGA)

Press Communique - 26 September 1999
Statement on Gold

Oesterreichische Nationalbank
Banca d'Italia
Banque de France
Banco do Portugal
Schweizerische Nationalbank
Banque Nationale de Belgique
Banque Centrale du Luxembourg
Deutsche Bundesbank
Banco de España
Bank of England
Suomen Pankki
De Nederlandsche Bank
Central Bank of Ireland
Sveriges Riksbank
European Central Bank

In the interest of clarifying their intentions with respect to their gold holdings, the above institutions make the following statement:

1. Gold will remain an important element of global monetary reserves.
2. The above institutions will not enter the market as sellers, with the exception of already decided sales.
3. The gold sales already decided will be achieved through a concerted programme of sales over the next five years. Annual sales will not exceed approximately 400 tonnes and total sales over this period will not exceed 2,000 tonnes.
4. The signatories to this agreement have agreed not to expand their gold leasings and their use of gold futures and options over this period.
5. This agreement will be reviewed after five years