Question for Those Advocates of A Gold Standard

Like Seth Lipsky of the wsj. I guess he's not aware of the inforrmation in this article (below)

Funny, I thought a key goal of american economic policy was to reduce dependence on the Chinese. This data means that the money supply in the United States would be determined by the gold mining and sales policy of the Chinese government. So if they wanted a "strong dollar" against their currency they could just pull back on  the amount of gold they put on the market. But US policymakers are trying to get the chinese to weaken their currency against the US dollar.

So unhappy with the Fed and want to replace it with the gold standard meet your new main central banker.

from the English version of the official People's Daily

China's gold production to exceed 320 tons this year

With imbalance between supply and demand in the global gold market, the world's gold production leader China is expected to continue to increase production. Deputy General Manager of China National Gold Group Corporation Du Haiqing predicted in Tianjin on Nov. 17 that China's gold output this year will be greater than 320 tons.

China's gold production surpassed South Africa in 2007 and now ranks first in the world. China's gold output has been increasing for three consecutive years along with the rising prices, and China has remained the world's largest gold-producing country.

According to the China Gold Association statistics, China's output of gold in 2009 totaled 314 tons, an increase of 11.34 percent.

China imports about 100 tons of gold each year. Adding 100 tons of imports to China's output of roughly 314 tons last year would yield a total supply of about 414 tons.

This year, gold output has consistently exceeded figures for 2009, at least until August, the latest month for which figures are available. In the first eight months of 2010, gold production was up 8.85 percent from the same period of 2009, at nearly 218 tons.

China is finding new gold reserves faster than it is producing the precious metal, so there is no danger of the country exhausting supplies.

China electrified the gold market last year when the State Administration of Foreign Exchange, part of the People's Bank of China, revealed that state reserves had jumped to 1,054 tons since the last such announcement in 2003, when it had 600 tons.

Joining those determining US monetary policy would be the rest of the world's top gold producersListed in order they are:: Australia, South Africa,Russia,Peru,Canada, Australia. Don't like the Fed:  ? meet your new central bankers under a gold standard.

Of course you wouldnt have to be a gold producer to control the supply of gold and the US money supply by manipulating the amount of gold in circulation and the price. A wealthy country like Saudi Arabia could simply buy up much of gold (or simply flood the futures or etf market) creating that massive inflation in the US everyone thinks a gold standard would prevent. The price of gold would pull up the prices of all the worlds commodities. If they wanted to create  massive deflation  they could simply drive down the price of gold effectively wiping out the savings of all americans as they found their savings accounts buy nothing.

Funny I thought a major goal of the US to reduce dependency on wealth potentially unstable states in the Middle East. Under a gold standard not only would our economy be dependent on their oil production it would be dependent on  whether they chose to use their healthy reserves to manipulate the gold market.

Still think the gold standard is a good idea ?