The next major step toward achieving gold convertibility would be to define the US dollar as a fixed weight of gold.
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Under this system, the dollar is defined as a fixed weight of fine gold, and the monetary base consists of gold coins.
The idea of defining the value of the dollar in terms of the value of a fixed weight of gold is not a radical notion.
Under the classical gold-coin standard (1717-1914) private banks and central banks alike issued currency convertible into a fixed weight of gold, with balance sheets consisting primarily of gold coins and short-term loans denominated in local (but gold-convertible) money.
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Nonetheless, it still defined the dollar as a fixed weight of gold, and for 20 years supported economic results for all Americans that were far superior to those produced by the paper dollar system of the past 42 years.
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This promise can be verified every minute of the day by observing the current rate of exchange between the dollar and gold, and, under a classical gold standard, by exchanging currency at a national bank for gold coins of a fixed weight and purity.
While the CPI at one time was the measure desired by the public, government efforts turned the CPI away from measuring the price changes in a fixed-weight basket of goods and services to a quasi-substitution-based basket of goods, which destroyed the concept of the CPI as a measure of the cost of living of maintaining a constant standard of living.
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Weight your portfolio towards high-quality fixed-income securities and focus your Canadian stock list on banks, utilities, and leading telecoms such as BCE Inc. ( BCE), which just raised its dividend by 5%.
While the illustration may have moved some investors from zero to a token weight in foreign, many investors and advisors fixed on the optimum point at 20 to 30 percent as a maximum foreign weighting.
They cannot bear to risk such capital losses again, so they stay away from equities and over-weight their portfolios with Treasury bonds and other conventional fixed income securities where they naively believe they cannot lose principal.
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Two cranes fixed to the platform will pull the ship upright, helped by the weight of the caissons, which will be filled with water.
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