ON law and government, science and technology, the future of banking, postmodern psychology, economic philosophy, human exploration all in all. Constitutional character of extraterrestrial colonies to be held in connection with terrestrial nation states--and fueling energy trade, sovereign and private, as they heat our homes here on Earth--these are but a few sample thoughts addressed by BLS.

Monday, February 16, 2009

Golden rules - 1790s were no 1970s

My journal entry is about gold standards -- the monetary kinds. History has shown what various interests mattered: principally, ones subservient or answerable to, if not, conversely, in direct control of government. The select few governments have maintained gold standards that appear as rather unrealistic…well at least in light of "current events," i.e. circa (pre-/post-) 1971 end of the golden `dollar.
The price of gold has been roughly the same since the Age of Revolution breathed a resilient last breath of air into the 18th century. Since 1793 and thru the year 1861, incidentally the start of the American Civil War, the fine yellow metal's going rate stayed quite noticeably..static. Its price throughout the entire sub-70-year period moved as much as one would affiliate with annual price dynamics today.
The aforementioned period of time was evidently one when governments were strong. Their prowess is apparent today when we may look in befuddlement upon gold's 70 years in insulation of price inflation.
Now it’s a brave new world. Think that your globe's cold no more, if warring still? Neither bipolar nor normal? Either way, you're likely to agree that the era's "keynote" feature, in many ways is (and has been) the USA. This peculiar nation-state is particularly relevant insofar as gold standards go; yet its important all around, too. Starting in 1934 American bankers, statesmen and their multinational colleagues successfully inflated the Revolutionary War era's child with lost time's stunted growth. The $20oz. plus/minus-a- couple-of-bucks-effective-standard (except in the 1860s) was the de jure old era monetary guard; but the aging "twenty" was not deemed deceased until Great Depression arrived.
Lawmakers at home and abroad tested new waters. It was now to be the Dollar standard era: gold was at or near $35 from 1934 and 33 years hence, thru 1967. (And today? By 1971 the US-gold connection was no longer standardized. ) And it was 55 years before '34 when gold grew 0%/yr, each year, as well.
The half century prior modern American involvement in the standard's promulgation commenced in 1879, when the $20.67 price was (apparently) fixed solid, indeed not far from the $19.39 of 1793. The 70 year cycle prior to the 1861 is chronologically comparable to the 88-year cycle of 1879 to 1971.
Nvertheless, the same source [1] on which data this entry relies on, suggests overall average annual price gains amounting to, um, a staggering 18-19% per annum mean smoothly, distributed across 3 centuries of diverse changes of various "standards", all across global gameboards.

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[1] <> "Did you know that the gold price in 1793 is about 20 dollars/ounce (ounce = ~31 grams) and now it is about $800 (about 40X gain in 300 years). http://goldinfo.net/yearly.html "

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