Sorry, I understand it fairly well... The value of gold today has virtually no effect on the value of the dollar, US or otherwise.
Stop and think about this for a minute. Ask yourself 'What is currency?' In a nutshell, currency is a tool that we use to facilitate trade... nothing more, really. You have a ton of barley to sell. You name a price. I pay you in dollars... cash, paper or electronic. Then you go buy what you need with that currency. It makes a lot more sense than trying to weigh off an exact amount of gold...
Go to 1913... the Fed was created to manage currency and the economy at the top level. The dollar was to be used as a floating currency where the value of the dollar could be expanded or contracted depending on the economic conditions of the time. While you may consider this to be a devaluation of the dollar against gold, another way of looking at it is that as the dollar has been devalued it's allowed for wealth of the country to be spread among the many, bringing general prosperity to many.
The present economic situation of the world was laid down during the second world war. In the early stages of the war the UK 'shot the wad' as Churchill called it... and emptied the nation's treasury to pay for the war by buying material and food from the US, Canada, etc. When that was gone, then came Lend-Lease in which the US transfered a large number of capital ships in exchange for strategic bases, etc... After that, trade was done purely on credit. Not having money to give... credit was what was available. The US then had to finance the acquisition of this material for the UK... thus the dollar was devalued. Since this created one of the largest economic booms in recorded history, pretty well everyone did well by the deal. At the end of the war the US was now the most economically and militarially powerfull nation on the planet. Since they also had most of the gold it probably didn't make much sense to try and use gold for trade... Thus the US dollar by default was the most powerfull currency at the time by virture of the strength of the US economy. Following Bretton Woods and other such meetings that followed the war and the creation of the IMF, the US dollar became the 'reserve currency' of many countries... basically the reserve currency of the world. The US pledged to peg the dollar to gold at 35 dollars or whatever the number was. As time wore on the real commodity value of gold exceeded the peg value against the dollar... with the result that gold was being redeemed from the US treasury at the pegged value and being sold on the commodity market at a profit. The pegged price was moved upwards several times until 1973 or whatever date when the US abandoned the gold standard because it was not feasable to maintain with the run on gold that was taking place. Thus you have a fully floating dollar that is tied solely to the value of the nation's economy.... and GOLD is a traded COMMODITY.
You can argue that the value of the dollar has declined against the value of gold... which I suppose it has. You can point to the 'devaluation' since 2007 for whatever myriad of reasons you wish to attribute it to... but then I'd have to ask you this.... Why has the value of gold fallen by 15-20% in the past week? Is that because it's a commodity or has the US economy strengthened that much against gold in the last 10 days? Again... I say gold is a commodity and the leaches of the commodity world are now dumping what they correctly realize is overvalued.
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Today's Featured Article - Field Modifications (Sins of the Farmer) - by Staff. Picture a new Chevrolet driving down the street without it's grill, right fender and trunk lid. Imagine a crude hole made in the hood to accommodate a new taller air cleaner, the fender wells cut away to make way for larger tires, and half of a sliding glass door used to replace the windshield. Top that off with an old set of '36 Ford headlight shells bolted to the hood. Pretty unlikely for a car... but for a tractor, this is pretty normal. It seems that more often than not they a
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