left out the link:

http://www.bbc.com/news/magazine-2196910...

I'm really just playing devil's advocate here and trying to understand why the counter-arguments that are used might not be correct. I would like to see such a system possible and in place.

And how does the biggest economy in the world make this transition? How does the federal government acquire the gold that it would need to back the dollar? Certainly if it began buying it the price of gold would go up drastically.

According to the M2 definition, there are about $10.5 Trillion in existence. So if the government went to the gold standard and set the price at $1,000 per ounce (a price that at today's rate nobody would accept), it would take $10.5 billion ounces of gold to back up our currency.

Here is an article on how much gold there is in the world by the BBC. If we use the larger estimate of 2.5 million metric tons of gold as the total in the world, then that is the equivalent of 80.376 billion troy ounces. So the US government would have to own 1/8 of the world's gold and have it sitting there, redeemable in Ft Knox (or someplace else obviously). If we use the smaller estimate of 171,000 metric tonnes then there are only 5.5 billion troy ounces in the world total so the price of the dollar would have to be $2,000 per oz and the US would have to have stockpiled all the gold in the world.

I'm not seeing how this could work. It seems to me that the world's need for currency has greatly outstripped its supply of gold.

And what happens if the US essentially gave up its own currency as the reserve currency of the world and turned to gold - which then means that a country like Russia which may have some of the largest untapped gold reserves in the world essentially becomes the defacto monetary power.

The way that we would pay off debt is through growth. If we got that kind of growth, people would demand higher interest rates for loans.

"Investment in companies - I stick to mutual funds like Vanguard. I really don't have the time to monitor individual stocks.

In the late 1990s, I did invest in gasoline futures and home heating oil futures. As risky as those are, I did make a killing on them."

We invest in the same way, except I have no exposure to precious metals right now and I've lost money or broken even almost every time I've traded derivatives. I know a decent bit about them, but when I speculate I usually lose.

"as soon as we start paying off such debt (which will likely never happen), interest rates will go up, and the interest on the debt will be overwhelming."
Rates would go *down* if we started retiring debt. We should start right now before some event causes rates to spike and generates a crisis.

Ah, yes. I had forgotten 'aqua regia'.

If nothing else, we are formulating what may amount to a getaway plan - a form of insurance policy.

Corrosion resistant and corrosion-proof are quite different claims.

Silver can corrode, just not nearly as fast as many other metals. Silver can go to +1 or +2 under extreme circumstances like salt water. Gold can be oxidized, too, if you put into acid.

As for silver, I would compare it to stainless steel in terms of ease of corrosion. Yes, both do corrode, just not all that quickly or easily.

Planning does not necessarily mean ready. When TSHTF, I want to be able to scat right then and have a place ready to go to.

Ag is resistant to corrosion? The chemistry I learned did not make it so. Silver recovered from sunken ships is clumped with corrosion and must be cleaned. Eating utensils and other dining ware using silver, when not used, suffer corrosion through oxidation called 'tarnish'. Am I wrong?

Which is why we are planning now. The collapse of the looters will take a while, unfortunately.

But the place has to be ready when needed or the exercise is futile.

And that is precisely why we are game planning for a physical Atlantis. Things would have to get REALLY bad in America for my wife to want to leave, but hyperinflation like Zimbabwe or 1920s and 30s Germany would do it.

When the accounting finally comes, the only option is going to be pull an Argentina.

And that will make this depression and the great depression both look like hiccups. And spread worldwide

1) The magnitude of the US debt is beyond repair. It may look like we are just over a year's GDP in debt, but what is missed is that as soon as we start paying off such debt (which will likely never happen), interest rates will go up, and the interest on the debt will be overwhelming. Federal Reserve chairpeople literally have no more games that they can play now that interest rates are effectively zero.

2) America does not even want to take symbolic steps to reduce the debt anymore. When Paul Ryan's and Tim Penny's plans for reducing the deficit (not the debt) are viewed as extremist when they aren't even close to enough, it is time to shrug.

The next time in all of your travels take a gander at all of the Feds. here in the good ole U.S.A. They remind you of an Arsenal compared to all other government buildings. Then inside is where all the fun begins.

"Bonds are a partial store of value. Relative to inflation, you lose about 2-3% per year over the last 100 years or so with bonds. Drip. Drip. Drip. It is a leaky faucet."
Yes. Short-term Treasuries alone, esp these days, are NOT a great store of value. 2-3% per year sounds right.

" If you work the numbers like I have in other threads, you will see that it works out to about one extra kid (including that kid's college education)."
It's a HUGE problem. On the other hand if we just took modest steps, the problem would disappear. We don't take modest steps though. All we want to do is take symbolic steps, like a politician at a ground breaking ceremony moving one 300ml of dirt. We should address it now while modest steps would work, not wait for it to become a crisis.

I think that maybe you hit on one of my weaknesses with regard to business startup, MikeM. I don't like going into debt. I am willing to put existing cash into the companies, but I just don't see a long term market. That is influenced by my biofuels company experience. I have been on several different sides of the energy business. My market in the alternate energy business was predicated on gaining wealth by absolving liberals of their irrational environmentalist guilt. Because liberals change which alternate energy they want with alarming frequency, it was difficult to see a long enough term future market to justify my capital investment. I should have let them remain in their guilt. Your comment about 0% interest rates for a Ph.D. chemical engineer was an interesting one. Chemical engineering is a very capital intensive business, much moreso than most other businesses. In general, we plan for a business on the 30 year timeframe, with typical breakeven points in the 7-10 year range. After the last ten years, I can have no confidence that the next ten, let alone 30, years are economically solid enough to make it worth that capital investment. It is this reason why AS struck such a sensitive nerve for me.

The turning point for this country was when JPMorgan, Rockefeller, and Carnegie sought the cronyist protection of government in 1896 when they put McKinley in as their puppet. That backfired when McKinley was assassinated, and Teddy Roosevelt took over.

As for the passive investment that stays ahead of inflation, I am willing to take risks in the stock market in order to increase my wealth. The increase in the stock market lately seems like a bubble because of all the low interest money out there right now. My concern is that many of these companies are ridden with more debt than they were prior to 2000.

It is harder than it looks.

Moreover, the division of time between starting a business while still actually doing the job of faculty member is not easy either. I tried to get them started during summers to the point of being self-sustaining. I could get that done on the technical side, but not the non-technical side.

I have been part of two startups. Where I need help with regard to business formation is on the financial side and the marketing side.