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Nude, Please educate me if I'm wrong, but doesn't heaps of deficit spending impact the value of the dollar? Also, what is the chart measuring the dollar against? I couldn't find that info. Also, they deserve a big raspberry for their conduct in toto.

Awgee, honest question: by using gold, silver, or another metal as a standard for currency leave it open to manipulation more so than now? And what if, for example,
 
Eva, the "78" awgee is referring to in hiws post is the DX, or US Dollar indeX traded on the New York Board of Trade. It is a collection of currencies valued against the dollar (and vice versa) and is traded as a future, like oil and other commodities. The value of that index can be influenced, shifted, hammered, kited, and cooked by any number of banks, brokers, investment firms, or governments and the President of the United States of America (take that Troop!) can't do a damn thing to stop it. Ask George Soros about his fun with the British pound.

As for deficit spending, if there was a causal relationship, you would see it reflected in the index. In short, the answer is no.
 
Eva - My take is that if one uses actual gold or silver coin it is impossible to maipulate. That is kinda the point.

But, there is controversy to using actual gold and silver coin. Maybe nickel and copper could be used also. And maybe a dollar could be actually excahnged for silver at any time at any bank? I know you asked Nude about this, but without a fiat currency, there could be very, very little deficit spending. The are large amounts of deficit spending now because the US gov just has to go to the Fed to borrow, (with t bills as collateral), money. The Fed is pretty much willing to let the US gov borrow as much as it wants. This is how all, and I mean all, wars are financed. Without a fiat currency, the US could not go to war unless the citizenry actually supported the war financially. How many wars do you think there would be if folks had to actually dig into their pockets to finance war?
 
Nudie, I've worked on his details before when he's been in L.A. The Secret Service agents that guard him use the term "POTUS". tag.

and awgee...re: war. My guess would be, none....unless it was WWII or 9/11 in proportions.
 
Troop, I'm not defending Bush. But saying he's responsible for the deflation of the dollar is like saying LAPD is responsible for people commiting homicide.
 
Pre-Federal Reserve, it looks like the markets could be manipulated. It also looks like the "worth" of dollar was changed as the price of gold and silver fluctuated.

I also did not know that US citizens could not own gold prior to Nixon taking the US off the gold standard.

Another honest question: given the amount of gold South Africa has (in the ground), if we were still on the gold standard and had less in reserves or in the ground, would the SA currency be stronger against the dollar?
 
No, because the strength would be relative to the reserves. You couldn't count the gold in the ground because it's speculation; until it is refined and weighed you have no real accounting of the total amount. Also, what would happen to the SA currency if Australia dumped 2 tons of gold into the SA economy overnight? Rapid and violent deflation.
 
Markets have been manipulated and still are. Check out naked shorting today.

I was unaware of those instances of politicians manipulating the silver content of a dollar and the value of silver due to findings. I do know that normally, extraction of precious metal from mines does not have much effect on the price because it costs alot to get ore out of the ground. You have given me something to investigate.
 
Another thing to consider awgee: while we wouldn't be able to finance wars by fixed money, we also wouldn't be able to finance any other large government program requiring massive capital outlays. Can you imagine the amount of gold reserves required to meet the Social Security payments every year? Add in medicare, welfare, education, and all the other social programs and there simply wouldn't be enough gold available to back the currency required.

edited to change "fiat" to "fixed"
 
Anyone's wallet feel lighter these days?

Oil Tops $83 as Weak Dollar Boosts Commodities

"Oil and other commodities denominated in dollars are actually falling in price in the eyes of foreign investors. That's because the dollar has been sliding against other currencies since the Federal Reserve cut interest rates last week. The dollar fell further on Friday on expectations another rate cut is coming."

www.cnbc.com/id/21019640
 
From your link IC:

Currency markets and buying by investment funds continues to draw buyers into the oil market, even as its fundamentals look weak, analysts say.

Light, sweet crude for November delivery rose above $83 on the Nymex, but alternated frequently between gains and losses. The contract gained $2.58 on Thursday. Oil prices peaked at a record $83.90 last week before retreating below $80 a barrel early this week. When an Energy Department report on Wednesday showed crude inventories rose last week, countering expectations for a decline, prices fell below $79 -- but then rebounded late in the day.

"There's definitely been a flow of fund buying here," said Tim Evans, an analyst at Citigroup in New York.

In other words, the price isn't justified by a demand for oil, but by a demand for dollar-denominated commodities as a place to stash cash profits.
 
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