Here is an idea to save our economy.

[kentuck]

First of all, we take all of our gold, at Fort Knox or wherever it may be, and we use it as collateral to sell US Savings Bonds to the American people. The US Government would guarantee the money and savings of all Americans up to $500,000 dollars. Most Americans would be worth considerably less but it would stabilize the markets and give confidence back to the American people that their money is safe and sound. Just like in WWII, we could have a nationwide campaign to "Buy US Savings Bonds".

These bonds would only be sold through the US Government. No banks would be involved. Do you think this idea would work?

[leftstreet]

1. Or just give us the gold

:-)

Most people barely have money to buy essentials right now.

Unemployment, decades-stagnant wages.

I don't know.

[kentuck]

2. There is no confidence in the Federal Reserve Notes.

Once people understand that their money is backed by the gold at Fort Knox and the US Govt, and not the banks, they would have more confidence in our markets. Also, they would feel secure knowing that their money is guaranteed by the gold in the Treasury of the United States. I think this would work.

[MercutioATC]

3. Two problems:

1) That gold is already collateral for other debts.

2) I fail to see how that would "save" our economy.

[kentuck]

4. I think it would give confidence to consumers..

and the market place. The Federal Reserve Notes are worthless and they know it. How is the gold collateral for other debts, since we went off the gold standard a long time ago? For example, we don't buy oil with gold - we buy it with the US dollar. Same with the Chinese trade deficit, it is backed by the Federal Reserve - not our gold - as far as I know??

[Jeep789]

5. How can gold be collateral for dollars when the value of both

fluctuates? Are you saying we would go back to basing the dollar on gold values? I don't see how it would work against other currencies anymore.

[kentuck]

6. Foreign banks that bought securities from US banks...

bought them with the understanding that they were backed by the US dollar, in other words, the US Federal Reserve Note, not the gold in our Treasury. However, the money and savings of the American citizens could be guaranteed by the gold on hand. Even if it fluctuated to $500 an ounce, it is now $1000 per ounce, the American people would still be much better off than with the present situation. It could be a temporary measure to restore confidence in the US consumers and the US markets. Those that invested in the foreign markets would have to eat their losses.

[Jeep789]

7. Those that invested in foreign markets?

Like Cheney? Now wouldn't that be Karma?

[kentuck]

8. Mostly banks...

with the credit default swaps, and other securities.

[Jeep789]

9. You could have let me had my sweet dream for the night

before you brought me back down to reality.

[pa28]

10. Nice Idea . . . wish we had more gold.

All the gold in fort knox would cover roughly the amount of money that went up AIG's nose and which the taxpayer is likely to never see again.

Another way, all that beautiful gold will cover only about 1/15th of our borrowing needs for 2009.