Nother stated way up thread you cannot lower the dollar.
Did not. I said you can't do it (effectively, for a meaningful period of time) if the market is driving the value up. http://iwt.mikevital....iwt?postid=35575 and http://iwt.mikevital....iwt?postid=35570
Nother seems to have some strange ideas that it couldnt hold, with a law making it illegal to trade outside the peg it certainly could. Works the same way it did with the ruble.
Is the Ruble a Reserve Currency? Is the Yuan/RMB? No, they aren't. Things are different for Reserve Currencies like the dollar - http://en.wikipedia..../Reserve_currency
A reserve currency, or anchor currency, is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, and commodities such as oil, gold, etc.
This permits the issuing country to purchase the commodities at a marginally lower rate than other nations, which must exchange their currencies with each purchase and pay a transaction cost. For major currencies, this transaction cost is negligible with respect to the price of the commodity. It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others.
You want to crash the world trade system by saying the dollar can't be taken outside the US?
Now on whether it is a good idea or not isnt the issue, the question becomes whether on can do it.
Box - 'I didn't say it wouldn't destroy the world economy, but he could do it.'
:-/
Last I looked, Obama isn't Führer. There's a big difference in going off a fixed exchange rate for the dollar and imposing a fixed exchange rate for the dollar. But I'm repeating myself...
That is why gold is at extreme highs and dollars acting as a safety currency is losing lustre
I thought you were not advocating a return to a peg to gold? Gold has no more intrinsic value than Darmstadium - people pay for it because they want it, not because it has special intrinsic worth.
Adjusted for inflation, the gold price peak was $2176 in 1980 according to http://goldprice.org...d-gold-price.html It's now at ~ $1294. It's got a ways to go to get up to where it was. So much for being a hedge against inflation and a weak dollar...
FWIW.
Cheers,
Scott.