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[quote] The U.S. Treasury Department has promised “hundreds of billionsâ€

S'mighty good thing that gold hasn't been the standard for a long time, then.

Libertarian screaming hissy fit in ten, nine..

Nitram it may not be the standard but the gold reserve still makes up a good part of the value of the dollar, as in the dollar is worth this because we can back it up. To trade it for debts that will never repaid only benefits a handful of society while screwing over the taxpayer and ensures that the value of the dollar will drop.

frigidmagi wrote:Nitram it may not be the standard but the gold reserve still makes up a good part of the value of the dollar, as in the dollar is worth this because we can back it up. To trade it for debts that will never repaid only benefits a handful of society while screwing over the taxpayer and ensures that the value of the dollar will drop.

The dollar is worth exactly what people think they can get for a dollar, which is why it's been collapsing until recently. I'm not denying it's the height of stupidity to pay for bailing out the weak; I suspect we'd slice that number down by requiring the keys to the Rolls, the jets, the mansions..

But the only devaluation this will cause is in gold.

I know this sounds like the end of the universe, but I'm gonna agree with Nitram here. For better or worse, the dollar is not even theoretically backed by Gold anymore. Nor are the other major currencies of the world. A dollar is worth exactly one dollar. Nothing else. I don't see this as affecting the price of dollars at all. The price of gold might collapse, but not that of dollars overall.

General Havoc wrote:I know this sounds like the end of the universe, but I'm gonna agree with Nitram here. For better or worse, the dollar is not even theoretically backed by Gold anymore. Nor are the other major currencies of the world. A dollar is worth exactly one dollar. Nothing else. I don't see this as affecting the price of dollars at all. The price of gold might collapse, but not that of dollars overall.

I actually see some effects. But they'll be the opposite of what those worrying think: Dollars will be bought in even greater numbers by central banks. Why? The value has fallen. It will, in time, go back up. When you've got centuries, what's a decade or two? The essential task.. Bailing out Freddie and Fannie.. Of securing the central banks continued benevolence was done. For weal or woe.