From Terry Coxon, Senior Economist, Casey Research:
The gold standard, under which any holder of paper dollars could redeem them for gold at the U.S. Treasury, is now within the living memory of just a few million Americans, nearly all of whom would be dangerous behind the wheel. But thanks to the money printing and the federal deficits that have grown to astounding scales since 2008, and thanks also to the clashing pronouncements of Ron Paul and Ben Bernanke, the idea of a gold standard has resurfaced in the public’s consciousness.
I’m happy to see the concept enjoying a revival. Reading about it in the mainstream press and hearing it mentioned on the cable news shows makes me feel a little less like a Martian. It has almost made me feel avant-garde.
Despite my enjoyment of the revival, I’ve noticed that the idea seldom is presented as a clear and definite proposal or as an invitation to revisit an institution that worked well in the past. Too often, it shows up as little more than a slogan or a taunt aimed at central bankers or as just a political fashion statement. So let’s take a closer look at what it really means. It’s not that complicated.
What Isn’t at Stake
The abolition of the gold standard has been the source of considerable mischief, but it hasn’t been the source of all mischief…