Some issues I have with the Gold Standard:
1. First, it isn't Constitutionally required. The reading of 'to coin money and set the value thereof' did not mean directly or indirectly that it had to be a metal based currency. "To coin" in the context as described in the Federalist papers simply meant to produce either by alloy or by valuation (Federalist 44). IE, it opened up to it not being on a precious metal standard. The only restriction to a non-federal currency is one by the States in which case that must be based on gold or silver (as to not have competing direct currency with the national currency, States would trade commodities instead).
2. The U.S. is no longer the primary gold producer. China and Russia are 1 and 3 in top gold producing countries (Australia #2). This allows for external forces to manipulate supply and demand- external forces not friendly to us.
3. One of the reasons why we finally completely went off the Gold Standard under Nixon was due to the outstanding notes far exceeding supply. Nixon was forced to consider taking a loan from the IMF just to cover existing gold bearer note calls- putting our financial control in the hands of an international body versus the ourselves.
4. Gold is no longer just a 'retainer of value'. When we were on the Gold Standard, its commodity value was based on its use as a currency or value holder. Now, it has a large industrial application in electronics and satellite/space industries. This has changed how gold is traded on the commodity market and where the valuation lays. It will only grow toward the latter and away from just something people see as a holder of perceived value. IE, the use of gold is changing.
Point 1
Article 1 Section 10
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Keep in mind this is a limitation on the States, and was intended to keep fiat currencies not under Federal Control from being generated. This did not place that requirement on the Federal Government.
Further, the discussion of what is legal tender versus "lawful money" is carried out to some degree here:
http://famguardian.org/Subjects/MoneyBanking/FederalReserve/FRconspire/lawful.htm note that in the letter exchange, a United States Note is not the same as a Federal Reserve Note, the former being issued by the United States Treasury, the latter a promissory note by a banking cartel accepted as legal tender after the Federal Reserve Act.
Point 2. Irrelevant. It's nice if we are the primary producer, but in the past that title has moved around, and iirc South Africa was it for a while. That the US is not may as much reflect the myriad environmental laws and changes in the mining act which no longer allow mineral claims to be taken to patent. An additional incentive to discover and mine resources was the concept that the discoverer, with sufficient development, could own the land, that seen also as incentive to not make a complete mess of it. Between all the various environmental, OSHA, MSA, and other regulations it's pretty difficult to establish a mine as a small scale operation, and small scale mines are like stripper wells, they may not produce much individually, but in aggregate can produce a significant amount. In California alone, it is estimated that at least 80% of the gold is still in the ground. States like South Dakota, Wyoming, Colorado, Nevada, Idaho, Montana, Georgia, and North Carolina (and yes, Virginia, Virginia) have all had their gold rushes, and doubtless still have significant untapped resources. There is gold in them thar hills. Getting to it and being
allowed to mine it is a different story.
Point 3:
One of the reasons why we finally completely went off the Gold Standard under Nixon was due to the outstanding notes far exceeding supply. Nixon was forced to consider taking a loan from the IMF just to cover existing gold bearer note calls- putting our financial control in the hands of an international body versus the ourselves.
Not only was the dollar unpegged from gold, but private ownership was opened up, as other than gold coin or jewelry. The effect this had was that the price of an ounce of gold went from $35 to roughly $700 in short order. Those gold bearer notes could now be redeemed for 1/20th of the amount of gold for a given dollar value. This made the value of a dollar in relation to gold, or the value of gold in relation to the dollar float, something we have now, traded openly as a commodity. Prior to that, the ways for a person to own gold included collecting coins, having geological samples, jewelry or stock to be used to make jewelry, or dental gold, whether in the form of teeth or fillings, or as gold foil packaged for dental use in making such fillings or teeth.
Point 4: Yes, silver, gold, platinum group metals are not just a store of value, but industrial metals as well. The older IBM mainframes had chips on a memory board with several thousand dollars worth of gold in them on one board, for instance. As chip manufacture has become more sophisticated, the amount of gold in an individual chip has decreased, but there are so darned many of them now. Recovering that gold is an industry in itself. It is also a metal prized for contacts because it doesn't corrode like silver or copper would. It has many uses, not just adornment as jewelry (which really was a store of wealth, too). Any other form of wealth has value as well, this just places another force in the marketplace for the metal.
There is something intangible about the metal, however, that attracts humans to it. You never hear of someone getting "Niobium fever" or "Tantalum Fever", nor, for that matter, even "Silver Fever", it's Gold that attracts the eye, and is revered. Perhaps someday we will find another store of wealth, but for now it is the favored and universally accepted one.
