I have a question for you to ponder. If Gold and Silver were used as money instead of paper what would that do to inflation? Would we still have inflation? No inflation? Where would that lead us? If all these so called promisary notes were actually backed by something solid?

I think if gold and silver were used to back the US Dollar there would be little, or no inflation because the US Treasury could not arbitrarily print money without the anchor of a tangible asset. That's not to say that the price of good or services would not fluctuate due to supply and demand. 

What is the Real Definition of Inflation?

 "An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures as when the supply of goods fails to meet the demand.

http://inflationdata.com/inflation/Inflation_Articles/Inflation_Definition.asp

GOLD IS NOT GOING UP – PAPER MONEY IS GOING DOWN

"In 1909, $1,000 bought 50 ounces of gold. Today it buys 0.83 ounces. This means that in the last 100 years the dollar has declined by 98.3% against gold. So in real money terms the dollar is now only worth 1.7% of what it was worth a century ago."

http://www.rapidtrends.com/gold-is-not-going-up-%E2%80%93-paper-money-is-going-down/

1913, was the last year the US Dollar was worth a dollar. The same year the Federal Reserve was sprung on us! Our founding Fathers warned us about central banks!

The Shrinking Value of the Dollar

http://www.infoplease.com/ipa/A0001519.html

 

Technologist touched on the problem with a non fiat currency and that's the problem that there just isn't enough currency around if there wasn't a fiat system. This isn't because of the robbery situation either. The fiat system is what allowed the prosperity we enjoy today to arise. If you take a look at a graph showing the level of economic prosperity, our economy didn't really take off until the value of the dollar was untied from Gold.

The problem we're seeing now is that those in charge of the fiat system are now abusing it and inflating it at will to pay whatever they're doing off. That's just not healthy and is what happened in Germany prior to WWII and Zimbabwe of today. When Mexico's Peso is regarded as a safer bet than the US dollar, we've got a problem.

Technologist, How do you correct for the attenuation created in fabric covering said piece of metal and the water content of sweat/water vapor? Also how do you not have the heating problem created with a doppler transmission? It sounds to me that you're just making a small microwave transmitter that could detect the radio opacity of metal, and based on the level of that attenuation figure out what it's made of. I just don't think people would be cool with you microwaving them. Even a low watt, high freq signal might create some discomfort in those you pointed it at because it would heat the top layer of their skin quickly.

That doesn't even tackle the 4th Amendment challenge that the ACLU would be screaming. (It is a smidgen intrusive)

I am aware of the problems that come with actually using gold or silver as currency. Carrying it around in your pocket could be an issue. I do believe that paper should be backed by reserves. Inflation and debt rocketed after we left the gold standard. It is like that childrens book where the kid says "the emporer has no clothes on!"

If lots of people suddenly stopped trusting fiat "paper" money, paper would be worth little and real precious metal would be worth it's weight in gold. All fiat currency was designed to drop to 0 value over approx 100 years. Our greenback seems well on it's way to the big 0.
Luckily for the US most all other country's paper money is in the same boat as ours so people seem to think of our money as valuable. That day might end soon. Gold was up approx 25% and silver 50% YTD. So you might say the dollar devalued by that amount in G & S terms.

"Carrying it around in your pocket could be an issue. "

   Considering 1/10 ounce of gold to be worth approx. 150$, you would have to much weight to carry, you could eliminate a fat wallet for a small change purse and save weight. CGH

cgh18 wrote: "Carrying it around in your pocket could be an issue. "    Considering 1/10 ounce of gold to be worth approx. 150$, you would have to much weight to carry, you could eliminate a fat wallet for a small change purse and save weight. CGH

$100 worth of 24K gold is very light but you'll have a hard time carrying around 24K gold as it's very soft. Just look at how fast coins wear out and you would see that gold would wear down very quickly if used as currency. 14K or 10K gold or even silver would end up being used more.

4=laro wrote: I dont know if this will help you understand the gold/dollar/inflation relationship or not, but i will try to help clear up the situation. 9/8/09 the dollar index (http://www.fxstreet.com/rates-charts/usdollar-index/) was trading at about the same as it is today.  Gold was trading around $980.00 on 9/8/09 (www.kitco.com), however today gold is trading around $110.00 more then it was on 9/8/09 so this tells me that the dollar is loosing value and gold is gaining value.  The change is happening at an alarming rate and you really should be concerned about the real value of a dollar bill and what it is doing to your savings.

4=laro wrote: How hard is it to store enough copper, brass, steel and lead to compare to storing one ounce of gold. An ounce of gold is a little over the size of a quarter, how big is a stack of lead that is worth $1200? and how hard would it be to lug around if you had to move it?24 Karot gold is not that soft, lots of people prefer 24 karot coins over 22Karot More so in Europe then in the US.

Maybe you're missing the way that Turboguy and I might carry our Brass, Copper, Steel and Lead. :)

Lead, Brass and Copper



Steel and Aluminum



Money Clip and Currency Protector



Comfortable light weight all season clothing
Just kidding, that's like 35+ pounds with the Mich, Interceptor, DAPS, ESAPI, Side SAPI and Groin protector.

As you probably figured out by now, I am retired.  I do want to share a piece of mail i received from OPM today, concerning my retirement amount for next year.  Also, I want to share with you that my share of the health insurance premium will be increased.

Annuities arse increased for cost of living adjustment (COLA) based on the criteria in Title 5 US Code sections 8340 (B) and 8462 (B)  The consumer price index for the quarter ending Septmeber 30, 2009 did not increase when compared to the 3rd quarter  in 2008.  Therefore, no COLA is payable in 2010.

So there you have it, no inflation last year and no increase in annuity so there will be none next year.