That thought had occurred to me too. I want Ron Paul to win too, but even if he does, I'm not sure how much and how fast one man can change things. So I think gold is still going up.
If Ron Paul won and made gold a parallel currency, wouldn't demand for gold increase, making you guys richer?
If Ron Paul could actually make gold the new money standard, its value would increase dramatically. I may have my facts incorrect and am to lazy to look it up but I believe there is enough mined gold in the world for 1 ounce per human being on earth, ie 5 billion ounces. If it is the standard for use as money it will be extremely valuable.
Currently the value in gold is in its aesthetic and symbolic use as wealth. Also as a hedge against inflation but most folks use the usual bond and stock investments for investment inflation hedging (saving, without losing money to inflation).
The real value to gold is anymovement towards being used as actual money. In practical terms this is unlikely to happen even if Ron paul were president.
I too think the price of Gold would go higher if Ron Paul wins. Actually, I am not really sure as to the implementation of the Gold Standard if some president in the future decided to implement it. The value of the US$ is inversely related to Gold, and so, I think the dollar would inmediately collapse with the implementation of an alternative currency, even if it is a transition period.
I do not know the exact figures, but I can guess that at least 90% of americans' savings are not in Gold or similar commodities, but in US$. What would happen, then? How would this new system come about?
And don't get me wrong, I am for the abolition of the Fed.
I'm no economist, but I think it would go higher too. I bet that even the suggestion that gold and silver might be legalized as competing currency would send the market into a panic of buying. But saying this doesn't remove the sting of loss in the nomial value of G and S over the last few days. Ouch.
MikeL:But saying this doesn't remove the sting of loss in the nomial value of G and S over the last few days.
Actually, I celebrate each time the price of gold falls, as should anyone who still has USD in the bank. It's another chance to get in.
Question to the group about the competing currency - the assumption in most of the replies seems to be that, due to the instability and lack of trust in the dollar, once a competing currency is introduced, the competing currency would be the popular one, and the dollar dropped. Doesn't Gresham's Law suggest the opposite, that a competing currency would fall flat on its face if the USD was still in existence?
A competing currency would not have legal tender status. This being the case, intelligent stores would have separate prices for everything: One in US dollars, the other in a competing currency. Gresham's Law only applies when two coins or bills with different intrinsic values are forced to have the same value by law.
(I've just been discussing this in the Liberty Dollar blog post)
If Ron Paul wins, and he does what he promisses to do, and he is not shot, then he should make gold a legal tender, as per constitution, and remove the legal tender status from FRNs.
Further, it was correctly noted above, that the Grisham's Law works when you have a paper tha says 50 dollars and a dollar coin that says 50 dollars, which is obviously not the same thing, by the law says they are.
As for the value of gold in that case, I think it would increase for two reasons :
- discontinuance of gold price suppression by our government
- sudden popularity
A sudden crash in purchasing power of FRNs, meaning that even other thing held equal, the one holding dollars will have less purchasing power that the one holding gold coins. Did I phrase this correctly? In other words, I mean that barring above two points the purchasing power of all gold stock wouldn't increase, (because there is only precious metal money stock either way, with FRNs being a convenience sertificates for PMs that at this stage of a con have a promise of stability and redemability through free market, but not holding those promises well, because of intentional, planned, never ending, high inflation) but the distribution of purchasing power among the market participants will change.
Ethically, this would be a good thing, as an unescapable punishement for readily taking FRN against our own supreme law of the land.
I just don't believe Ron Paul will be allowed to do what he wants, or what he says he wants...