What would a unilateral revaluation of gold do for the US Dollar

[Filthy Keynes]

Suppose on Monday at 8am the US Government declared by fiat that gold is now worth, say, $10,000/oz. What would be the ramifications of that move?

I think they could save the banks because they could then recapitalize them.

[Neuro]

Suppose on Monday at 8am the US Government declared by fiat that gold is now worth, say, $10,000/oz. What would be the ramifications of that move?

I think they could save the banks because they could then recapitalize them.

Well they filled up Fort Knox, the last time they revalued from 20 to 35.

[Plastic]

It does'nt have to change anything imo, just means gold is more expensive in fiat paper.

[General of Darkness]

What that would mean is that now a suit and a pair of shoes costs $10,000. ;)

[Twisted Titan]

Two things..........

[madfranks]

Suppose on Monday at 8am the US Government declared by fiat that gold is now worth, say, $10,000/oz. What would be the ramifications of that move?

I think they could save the banks because they could then recapitalize them.


Gold doesn't get it's value by gov't fiat, so the government can not declare gold to be worth anything. What the gov't could do, and what I think you really mean, is re-peg the dollar to gold at a rate of $10,000 to one oz of gold. This would destroy the dollar overnight, because currently the dollar is a free floating fiat currency and the world reserve currency. Devaluing the dollar to roughly 13% of what it was right before would destroy it's status as world reserve currency, and usher in a bout of inflation so large it likely wouldn't survive.

[Ponce]

The US alone could not do it because other countries currencies are more valuable the US fiat.

Chinas GDP last months was of 9.5%........like I said before "The world does not revolves around the US and where other countries will move forward the the US will be at a stand still".

"No Export = No Recovery"... Ponce

[FreeEnergy]

10% of China's GDP is WalMart. US-sold goods is probably 50% of China's GDP. The TPTB's business will stop evolving around US when they'll invent another market to sell its crappy chinese stuff on, and right now the second market is just ain't out there.

I've been talking to my friend who invests in south america...he says that places like Colombia are becoming terribly americanized, i.e. more and more malls and crap to sell to people. What he doesn't realize is that is is NOT "americanized" it is a business by the trading tribe, that's how they do business. That's how they find new markets.

Yet, even if you give every colombian 2 cellphones, a car and a mortgage, you aren't even close to creating a market equal to US.

But these are desperate times for trading tribe, if they are eyeing South America. That's too far off beaten paths to ship goods.

[Sparky]

Suppose on Monday at 8am the US Government declared by fiat that gold is now worth, say, $10,000/oz. What would be the ramifications of that move?

I think they could save the banks because they could then recapitalize them.


Gold doesn't get it's value by gov't fiat, so the government can not declare gold to be worth anything. What the gov't could do, and what I think you really mean, is re-peg the dollar to gold at a rate of $10,000 to one oz of gold. This would destroy the dollar overnight, because currently the dollar is a free floating fiat currency and the world reserve currency. Devaluing the dollar to roughly 13% of what it was right before would destroy it's status as world reserve currency, and usher in a bout of inflation so large it likely wouldn't survive.


Let's look at the flip side. If they backed their declaration with the offer to redeem US dollars for gold at a rate of $10,000 per ounce, it would no longer be fiat, and it would become the only world currency backed by gold. Though the "exchange rate" might initially look bad for the USD, in the long run that would probably strengthen it as the clear currency of choice.

Just thinking out loud...

[Trinity]

I say take it one step at a time. First the Fed has to recognize on it's books the spot price instead of the fictional 42 dollar an ounce value it currently has.

[FunnyMoney]

10% of China's GDP is WalMart. US-sold goods is probably 50% of China's GDP. ...


The USA makes up about 17% of China's export market. This is down from 30% about 10 years ago.

South America doesn't hold a candle to Asia. Bilateral agreements are the next wave at what we see currently. You don't need a world reserve currency if you are willing to base contracts on bilateral trade agreements and if the partners have relatively stable markets and mediums of exchange. China has plenty of mediums of exchange and are sucking up metals for the future where those will be the most desired mediums.

I would not worry about China or the "tribe", the money game has made it through everything macroeconomics has thrown at it. The dark ages didn't defeat kings and centralized powers, so I don't think the USA downfall will spell anything different. Prepare for the status quo, just getting worse that's all.


For the OP, I don't think the central banks can do that or would want to. Their agenda is to remain in and grow their power. They will do things in a step by step fashion toward that goal. Eventually, gold will be 10,000 per ounce in USD but it won't change things as much as you think. Rhodium went to 10,000 per ounce and back to under 1,000. It will go back to 10,000 in just a few more years. No matter how you play with the terms or the macroeconomics, there's no free lunch. The top sucks off the bottom and will gain strength. The bottom, and the workers will continue to see their standards of living decline, regardless the exchange rates, currency wars, pegs or whatever.