the secret return to a 'gold standard', page-7

t4p

timber wrote "Massive dollar devaluation would trigger chaos in world markets."

While you suggested the option of "Significantly increase the price of gold".

Have a look at wikipedia's traditional definition of devaluation, especially where it mentions gold

http://en.wikipedia.org/wiki/Devaluation

I do not necessarily agree or disagree with timber's views.

I am just pointing out that devaluation of a currency can be against gold - that was the approach when the gold standard was in place. I think his option is the same as yours, and the devaluation would mean a much higher USD POG (yeah say all goldiebugs).

We are hoping that Bernanke will achieve this by his money printing, eventually, when the velocity of money circulation rises and causes increasing inflation while there is continued negative real interest rates.

loki


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