Now that it appears to be a “done deal”, it’s quite obviously nothing but a SELL-OUT of ordinary Americans – and a free pass for the bankster-criminals.

You are correct sir. This whole process has nothing to do with the “poor defenseless home owner” and everything to do with people not wanting to go to jail.

Banks would have cut a check for many times that amount if it kept them from being prosecuted for fraud.

This pitance amount will do nothing for the underwater homeowner. By all account $20K will not make the average $50K homeowner any more solvent. In fact it just made EVERYONES house $20K less equity.

When it comes to HOLDING precious metals, I firmly believe that physical bullion is the ONLY way to go – for a multitude of reasons. Perhaps moving to the top of the list of reasons is “confiscation”. If (when) bullion confiscation takes place it will START with every ounce of bullion held in an “account” or “ETF”.

As for the separate issue of going BACK to some sort of precious metals-backed economy, that is simply MUCH too complex a subject to BEGIN to address in a comment.

Suffice it to say that there are NO valid arguments against returning to an economy which uses REAL “money” – instead of fraudulent paper currencies.

Dixiebrick, there ARE no good solutions. This is the WORST mess that has ever been made of a nation’s housing market – by a factor of ten.

Lowering borrowing costs at this point is nothing but an irrelevant bandaid. It’s NOT going to rescue MILLIONS of mortgage VICTIMS who are 20% underwater, 30%, or even more.

The ONLY measure which would help to fix this market (other than simply FORECLOSING on 10-15 MILLION American families) is to pay-down mortgage principals (across the board) by approximately 20%. It would likely cost somewhere between $1.5 TRILLION and $2 TRILLION to do so.

It’s that, or just watch this market BURN (for another 20 years or so)…

One thing you could do is make it *optional* to receive a portion of pay in coin forms of US legal tender. Then subtract the acquisition costs of the coinage from the payout. That way the recipient pays, not the business.

For example, say you have to pay a $2000 (Federal Reserve Notes) paycheck, but the worker opts to be paid in silver eagles. Say the all-in costs of acquiring each silver eagle is $40; so you can order 50 of them and pay the employee $50 face value in silver. Your business would list the difference of $1950 as an expense.

There shouldn’t be too much disruption since you could just have the coins shipped to the worker. I would imagine most would not want every single paycheck in this fashion… just the portion they plan on keeping for savings.

As far as the bigger picture, I agree a federal gold standard is logistically easier, for a variety of reasons. But it isn’t required. It can all be done privately, especially now that we have a digital banking system. For example, one entrepreneur is starting a gold-backed debit service (essentially, a checking-only bank) with accounts 100%-backed by gold, in the wake of Utah’s recent law expanding the monetary scope of gold and silver:

http://www.dgcmagazine.com/blog/index.php/2011/05/23/craig-franco-of-utah-opens-gold-and-silver-depository-go-shopping-with-gold-backed-money/

So, one can “put their own gold” in a banking system “compatible” account which recognizes the gold’s value at 100% backing, and still be able to make FRN dollar-denominated purchases, integrated with the current electronic banking system.

Really, not much more is needed than this, when one distinguishes between the very different uses of money as (electronic) currency and a store of value.

In theory, it would be easy to even transact in bitcoins, and save balances in gold, provided trustworthy gold depositories such as this one (there are others as well, such as BullionVault or GoldMoney, but they are less integrated with the current payments system).

This is Financial Devolution: We are returning to a state of nature.

GL