http://mises.org/books/historyofmoney.pdf

Thank you, but your link goes to a place where you can purchase the book for $25.00. Sorry, but it’s not my burden to do your homework for you and to spend time and money searching for the argument (or evidence) you claim exists out there.

If you have an argument to make, please feel free to make it. I’m not interested in bare conclusions.

Was it yet another bank bailout? Has another bank sucked up precious resources belonging, in this case, to the people of Europe? Gold is needed to bring confidence to the Euro currency, as often noted by Germany’s Bundesbank, which seems to be less kind to German banks than the ECB. Why should the ECB be permitted to sell gold to closely connected derivatives dealers, if the primary purpose is to save those dealers from the bad decisions they have made, and the end result is to reinforce moral hazard? Should banks like Deutsche Bank be allowed to take on more derivative risk than they can afford without involving publicly owned assets? Did Deutsche Bank issue naked short positions? Have innocent European citizens now had their currency placed at more risk, and some of their gold stolen from them, simply to enrich private hands? All of these questions are begging for answers.

http://seekingalpha.com/article/129128-did-the-ecb-save-comex-from-gold-default

On Tuesday, March 31st, Deutsche Bank (DB) amazed everyone even more, by delivering a massive 850,000 ounces, or 8500 contracts worth of the yellow metal. By the close of business, even after this massive delivery, about 15,050 April contracts, or 1.5 million ounces, still remained to be delivered. Most of these, of course, are unlikely to be the obligations of Deutsche Bank. But, the fact that this particular bank turned out to be one of the biggest short sellers of gold, is a surprise.

I searched that web site but could not find the book you are referring to. Would you mind linking to it AND quoting the relevant part?

Fundamentally, how is that any different from the situation today? There are numerous providers of e-gold. Presumably some are tempted to issue more paper gold than the amount of real gold they hold in reserve.

And the same argument would apply to the United States back when we were on the gold standard, right?

No. The difference is: The silver / gold certificates at that time in circulation were immediately redeemable for silver / gold just by strolling into a bank. Anyone could do it, easily. No need to hire an armored truck to go get your 100 ozs if you want to take delivery of a futures contract. The inconvenience of actually taking delivery of 100 ozs. is part of the reason so many otherwise-honest futures buyers don’t take delivery of their gold. And the fraudsters know it and take advantage of the fact that few take delivery. It’s what makes it so easy for them to be able to get away with issuing more contracts than ozs. exist.

Of course, there have always been some banks, even in the 1850s, that couldn’t resist trying the corrupt, fraudulent tactic of issuing certs beyond what they actually held in their vaults. And when the market got wind of it, which it always did, a run on the bank ensued — which, rightly, brought down the fraudulent bank, and corrupt CEOs got tossed in jail. So the anti-fraud system worked.
Some innocent people got hurt, to be sure. BUT, the fraud WAS stopped before the damage was massive-beyond-words, as we are seeing today. The trouble really WAS contained, unlike Mr. Bernanke’s announcement in 2008.

BUT when the Fed Reserve System came into to being to “stop the runs on banks” — with the eventual result, as planned, of going off the gold standard completely — the fraudster banks no longer needed to worry about being found out. The Fed would look after ‘em, and no banksters need fear jail –as we are seeing the Fed do, just now, today.

Multiple, independent auditing agencies, some governmental, some non-profit non-governmental public interest groups, some for-profit rating agencies, all independently auditing the vaults of the digital-gold banks is the obvious answer to the reality that banks will ALWAYS succumb to the temptation, if they think they can get away with it, of issuing more gold-representers than they have gold. It’s a known ill, with a known cure.

What’s different today that makes a return to a gold standard so doable is that we can use exceedingly tiny amounts of gold for tiny transactions, because we can do it electronically. This was not possible in 1850. The gold you carried around back then had to be big enough to see. A microgram, with the purchasing power of a roll of t.p., would have been too easily misplaced to work.