Will Obama Emulate FDR [and Nixon] and Devalue the Dollar?...

Will Obama Emulate FDR [and Nixon] and Devalue the Dollar?
FYI

jagor 12-21-2008 10:45 AM | Post #2606920 | 9 Replies 2
Now that both the outgoing Bush administration and the incoming Obama administration seem hell-bent on undertaking a mad frenzy to spend trillions of dollars the government doesn't have and never will have, it seems to me that the only way to pay the bills will be by devaluing the dollar.

People say that President-elect Barack Obama is an avid reader; I wonder if his reading has included an account of Franklin Roosevelt's devaluation of the dollar by 40% against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. Yep, for those of you who are too young to remember, FDR confiscated all the gold and "paid" for it with paper!


And, in more recent times, some of you may remember that Richard Nixon devalued the dollar twice and decoupled the dollar from gold once and for all--one of the most dastardly deeds in the annals of American economic history. We know the rest: the price of real money [gold] has skyrocketed from 35 paper dollars then to over 800 paper dollars per Troy ounce today. And you still don't believe in hyperinflation? When was the last time you paid three cents to mail a first-class letter?

Will history repeat itself once more? Will Obama' s economists devalue the dollar once more? The way things are going, it's a likely bet.

Read more in this article by Hong Kong-based investor Paul Ramscar: http://www.thestandard.com.hk/news_print.asp?art_id=75737&sid=

Excerpt: "Some prominent figures...have been proposing certain types of a new monetary system. US President-elect Barack Obama was very quick to accept the invitation to the next meeting of 20 of the world's largest economies in London in April so perhaps there has already been some talk of a new monetary system behind closed doors."

Merry Chirstmas and Happy Holidays, anyway, to everyone who posts on these Morningstar forums!


Jagor

P.S. Just to bait all the Francophobes and France-haters who proliferate on these forums, everyone knows that gold is measured in "Troy ounces," but, guess what: the "Troy" ounce is named for the city of Troyes, which is located in the Champagne region of...France! By the way, one Troy ounce is exactly 31.1034768 grams, about 10 percent more than the avoirdupois ounce. Just to make the Anglophiles happy, however, one Troy ounce equals 20 pennyweights. But just try to go out and buy a "pennyweight" of gold these days... http://www.troy-ounce.com/