Is the gov't making money that can't be backed up?

[cookie]

A friend of mine told me that soon the gov't is printing far more money than we have to back in gold.    (Of corse I know the debt we have with China ect.......).       Well, I am not good at History but does anyone know if this has happened before and if it is a good possiblity it could happen again in the near future?
       About 12 years ago I knew of 40 coworkers who had to wait 6 weeks to access their money (don't think that bank was FDIC insured nor all the details------but going without a paycheck w/families destroyed them for quite awhile).         ANY THOUGHTS ON THE SUBJECT?

[Nickie]

Cookie, the Fed doesn't have to literally "print" money to create money.  The $700 billion bank bailout by Bush was not accomplished by actually printing paper money.  They simply wire transferred funds to the 15 or so banks/investment banks involved.  The other side of the entry was US debt.  For anybody that understands basic accounting, here is the simplified entry:

Debit - Loans Receivable...........$700 billion
Credit - US National Debt...........................$700 billion

Somebody here may know the real number, but the amount of currency actually backed by GOLD in Fort Knox, Kentucky, is something like 10%, maybe much less.  The rest is not backed, but instead is covered by the full faith and credibility of the US government to pay. 

[cookie]

^^^Thanks for simplifying it Nickie.         The part on "faith" is where US goes down the tube.   Many people adviced me not to keep an account.   (especially at the joke of an interest rate).    Many people believe there will be a day where we won't be able to get our money out.        

[Nickie]

^^^Thanks for simplifying it Nickie.         The part on "faith" is where US goes down the tube.   Many people adviced me not to keep an account.   (especially at the joke of an interest rate).    Many people believe there will be a day where we won't be able to get our money out.        

If everybody tried to withdraw all their money, in cash, at the same time, they couldn't because it's not all there!  It's been lent out.  It's called a run on the banks and that's what happened in the 1930's.  The government would freeze the banks and try and restore confidence by pumping an infusion of capital into the banks...like what happened in 2008.  Most of that bank bail out money has been repaid btw

[Ghost_Tracker]

Nixon took us off the "gold standard" in 1973 or so, so in my opinion it
doesn't matter.  There were complex economic reasons why he did it;
I don't know what they are, though.
(It means that the money doesn't actually represent a certain
amount of gold anymore, anyway.)
I think it would be more accurate to say that the government is putting more
money into circulation, in an attempt to prop up the economy.  In my opinion,
there's two things to know about that:

1.)  It doesn't work.  Maybe it helps over the short-term, but not over the long-term.

2.)  It causes inflation, which of course hurts the economy.  As a matter of fact,
 my dad told me that they're expecting inflation to kick in this Fall.

I don't mean to be a pessimist - and I'm not talking "Armageddon-calibre" stuff here - but - i.m.o., this economy really is in trouble.  We have inflation heading our way at a time when gas prices are 4 dollars a gallon and soon may be hitting even 5 dollars a gallon; employment is NOT decreasing, a good friend of mine told me that what's really happening is that people have been unemployed so long that they're "dropping off the books" - in other words - yeah - the gov. is cooking the books to make it look better than it really is; this is all at a time of skyrocketing medical costs, increasing population; shipping money overseas to China (THANKS George Bush!); and huge multi-trillion dollar deficits.  In my opinion the writing's on the wall; the stock market's going to suffer a MAJOR crash sometime in the next few years.  I feel these wild oscillations from day-to-day are a sign of it - one day it's up 150 points, but the next day it's down 175 or something.  Plus it's "overvalued" right now - the stocks aren't ACTUALLY worth what they're claiming they are.  Again I'm not talking"Armageddon-level" stuff here, but in my opinion if you're in the market you might want to consider gettin' out while the gettin's good.   

[TruckerMike]

Current US currency is backed by the Federal Reserve Bank. This is not part of the US Government but a private bank in itself. This was done back in 1914. The gold backed dollar has not been so since the 70's. You see the results of the "printing" of more money by ways of the value of precious metals like gold silver and platinum raise or lower in value as the value of the dollar raises or decreases. If the dollar goes up, gold goes down. the opposite is also true. While the Reserve is who issues the money, the Federal reserve can call in the dept at anytime where the US Treasury would have to pay in Gold and silver to take care of the debt. Thats in a nutshell for ya

[TruckerMike]

Nixon took us off the "gold standard" in 1973 or so, so in my opinion it
doesn't matter.  There were complex economic reasons why he did it;
I don't know what they are, though.
(It means that the money doesn't actually represent a certain
amount of gold anymore, anyway.)
I think it would be more accurate to say that the government is putting more
money into circulation, in an attempt to prop up the economy.  In my opinion,
there's two things to know about that:

1.)  It doesn't work.  Maybe it helps over the short-term, but not over the long-term.

2.)  It causes inflation, which of course hurts the economy.  As a matter of fact,
 my dad told me that they're expecting inflation to kick in this Fall.

I don't mean to be a pessimist - and I'm not talking "Armageddon-calibre" stuff here - but - i.m.o., this economy really is in trouble.  We have inflation heading our way at a time when gas prices are 4 dollars a gallon and soon may be hitting even 5 dollars a gallon; employment is NOT decreasing, a good friend of mine told me that what's really happening is that people have been unemployed so long that they're "dropping off the books" - in other words - yeah - the gov. is cooking the books to make it look better than it really is; this is all at a time of skyrocketing medical costs, increasing population; shipping money overseas to China (THANKS George Bush!); and huge multi-trillion dollar deficits.  In my opinion the writing's on the wall; the stock market's going to suffer a MAJOR crash sometime in the next few years.  I feel these wild oscillations from day-to-day are a sign of it - one day it's up 150 points, but the next day it's down 175 or something.  Plus it's "overvalued" right now - the stocks aren't ACTUALLY worth what they're claiming they are.  Again I'm not talking"Armageddon-level" stuff here, but in my opinion if you're in the market you might want to consider gettin' out while the gettin's good.   

Actuelly your not to far off here, but blaming any President is pointless. Under the Constitution, only congress can make debt. The president can only veto. So while its nice to blame the President, its by far more Congress that is at fault.

[Ghost_Tracker]

Current US currency is backed by the Federal Reserve Bank. This is not part of the US Government but a private bank in itself. This was done back in 1914. The gold backed dollar has not been so since the 70's. You see the results of the "printing" of more money by ways of the value of precious metals like gold silver and platinum raise or lower in value as the value of the dollar raises or decreases. If the dollar goes up, gold goes down. the opposite is also true. While the Reserve is who issues the money, the Federal reserve can call in the dept at anytime where the US Treasury would have to pay in Gold and silver to take care of the debt. Thats in a nutshell for ya

So what would happen if the Federal Reserve called in the debt and the US Treasury refused to pay it or didn't have the silver and gold?  And what circumstances (in a "real world way") would cause the Federal Reserve to call it in?

[TheGypsyDove]

HELP does anyone know a politician with common sense ?

[TruckerMike]

Ron Paul, oops he is crazy, wants to legalize Pot, damn Libertarians

[Ghost_Tracker]

"Addendum": 08/06/11.

No.  It's not.  The government no longer HAS any money! . . . .   


         

[chiliD]

HELP does anyone know a politician with common sense ?

File that with Santa Claus, the Easter Bunny & Leprechauns.

[TheGypsyDove]

File that with Santa Claus, the Easter Bunny & Leprechauns.

You forgot fairies,elves & pixies !