Subject:
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Re: A hypothetical economics question...
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Mon, 4 Mar 2002 21:40:42 GMT
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Viewed:
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371 times
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In lugnet.off-topic.debate, Richard Marchetti writes:
> The corresponding amount of paper money to precious metals is by definition
> in U.S. federal law supposed to be .999 fine 1 oz. silver for a dollar (it is
> essentially the definition of a U.S. dollar, despite the existence of Federal
> Reserve Notes), and 1 oz. gold for twenty dollars.
Completely aside from the issue of how it's supposed to be, I've been wondering
-- why the 20:1 ratio? It seems like a bad idea to have a ratio instead of
just gold certificates and silver certificates and maybe a daily exchange rate.
Do you know the thinking behind the ratio?
I assume it was thought to be a good value ratio at the time. If I'm
interpreting the web page that I just pulled up right, the ratio today is more
like 60:1.
Chris
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Message has 1 Reply:
 | | Re: A hypothetical economics question...
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| (...) You raise an interesting point -- I gather you think the true value is best determined through daily market forces. I am pretty sure the point of a ratio rather than certificates traded for daily value has to do with making the value static. (...) (22 years ago, 5-Mar-02, to lugnet.off-topic.debate)
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Message is in Reply To:
| | Re: A hypothetical economics question...
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| (...) I hate to be overly harsh -- but you have no idea what you are talking about. The corresponding amount of paper money to precious metals is by definition in U.S. federal law supposed to be .999 fine 1 oz. silver for a dollar (it is essentially (...) (22 years ago, 1-Mar-02, to lugnet.off-topic.debate)
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