Posted on 01/19/2012 12:56:22 PM PST by SeekAndFind
Republican presidential candidate Newt Gingrich is calling for the United States to think about returning to the gold standard.
Speaking at a foreign policy forum in South Carolina on Tuesday, Gingrich advocated a "commission on gold to look at the whole concept of how do we get back to hard money."
Gingrich, a former Speaker of the House, has spoken in favor of a "hard money" policy in the past, but these were his strongest comments to support reinstating the gold standard.
Gingrich would model his "gold commission" after one put in place after Ronald Reagan was elected, when the nation was battling double-digit inflation. But even then, the commission overwhelmingly rejected the idea of a return to the gold standard.
One of only two members of the 17-member commission to endorse a return to the gold standard was Ron Paul, one of Gingrich's rivals for the GOP nomination.
The United States first moved away from the gold standard, under which the dollar was backed by the nation's gold reserves, in 1933, and dropped it altogether in 1971. Despite support for its return by some on the political right, few mainstream economists support its reinstatement.
Chief among the problems is that with a dollar pegged to gold, U.S. goods could become uncompetitive on the global markets compared to goods priced in euros or yen.
The return to a gold standard is a central point in the campaign of Paul, a Congressman from Texas who also advocates abolishing the Federal Reserve.
In his comments Tuesday, Gingrich also spoke sharply against the Fed, saying it should focus on keeping prices in check, dropping the dual mandate of job growth and fighting inflation.
(Excerpt) Read more at money.cnn.com ...
It would be decried as racist...
Sad, isn't it.
Well there is also silver, nickel and copper. The point is to back the currency with something. But it is already to late to save the dollar. Imagine going to a gold back doller owning 16 trillion in direct debt and 100 trillion in unfunded liablities. Not going to happen.
Interesting. So you’re arguing for a silver standard. I haven’t thought much about that but it occurs to me that the virtue of gold is that the supply is relatively fixed so that there is little opportunity to increase the money supply too fast. Not so with the case of silver.
Gingrich has a Nut side.
The problem is that too few Americans, today, really understand the role of money as a Medium Of Exchange.
William Flax
At least it would cut down on government counterfeiting.
I checked an app that compared the inflated values in dollars. Turns out that the dollar has lost about 6/7 of its value since I was born.
Steve Forbes:
“Imagine if the government decided to increase the number of minutes in an hour from 60 to 70. You can hear policymakers congratulating themselves: “People will work longer at the same pay. This will be a boon to productivity!” Or if Washington increased the number of inches in a foot from 12 to 15: “Home buyers will thus get more house for the same price and that will stimulate home buying!” Preposterous? It’s no more foolish than what we and other countries routinely do with our currencies.”
Just remember, when William Jennings Bryan uttered that phrase, he was calling for massive inflation, to allow farmers who had borrowed money to pay off their loans with cheapened dollars.
RE: The problem is that too few Americans, today, really understand the role of money as a Medium Of Exchange.
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Over a decade and a half ago China fixed the yuan to the dollar. If there had been any mistake in the exchange rate it would have been flushed out in trade patterns fairly quickly.
Again, to simplify: If you sell a bottle of wine for four loaves of bread but suddenly notice you’re getting only two loaves, you’ll adjust your price pretty quickly to ensure you’ll get those four loaves again.
By fixing the yuan to the dollar Beijing outsourced its monetary policy to the Federal Reserve. And for this “manipulation” Washington politicians and policymakers are in a lather of outrage. This fixing of a measure of value has enormously facilitated commerce—and thus prosperity. During the last 15 years U.S. exports to China have increased 650%, China’s exports to the U.S. almost 670%.
Adjusting a currency does not ultimately improve a trade balance. Look at Japan: The dollar has depreciated 70% against the yen since the 1970s, when we pressured Tokyo—as we are now pressuring China—to appreciate the yen in order to reduce our trade deficit with Japan.
Result: Japan’s exports have grown markedly, and our trade deficit is far greater today than it was 30 years ago.
So Make no mistake: Arbitrarily changing a currency’s value is a form of protectionism. Instead of raising taxes on imports the same effect is achieved by changing prices through currency devaluation. In 1984 one dollar bought 250 yen. Say that a widget cost 250 yen (or $1). If what the dollar could buy dropped from 250 yen to 165 yen, then the price of the widget went up to $1.50. That’s as good as a 50% tariff.
The statists oppose stable money under the gold standard because then the government won't be able to afford the socialist programs that are the source of their popularity with the parasites, that keeps them in power.
It worked until the jackals in D.C. wanted to strip everyone of any real worth...Now, who is it a soda cost $.05 in 1920 and $1 now, or a house for $20k instead of $200k??
The U.S. already does it, but it’s only a ‘collector’ thing to most people; just visit the U.S. Mint to convert your Federal Reserve Notes to U.S. Legal Tender.
And so much for some supposed ‘Conservatives’, but I don’t recall (as The People) giving the Fed the ability to re-write “...To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures” and print worthless paper.
I’d say it was a damn bit tougher in the years past when we DID have a standard to inflate the value of $$ right out your wallet w/out The People revolting outright.
****yeah, but if you were sitting on a few ounces of gold....what about including silver in the standard?****
For that matter we could include all commodities together. The problem comes with derivatives manipulation. If we eliminate that problem we could have a broad base of support for our currency.
Platinum, gold and silver would seem to be the most stable and reasonable backing. The problem with a gold standard is, of course, that nations holding our currency would immediately seek to exchange their dollars for our gold and our gold supply would quickly disappear. Is that a problem? probably. The bigger question, how would this affect our national debt and our pending budget deficits which are the real anchors holding this economy back. It’s worth investigating but not something I would enter into casually and without serious weighing and measuring.
"U.S. goods could become uncompetitive on the global markets compared to goods priced in euros or yen.
And that's a bad thing?
"Ain’t gonna happen and he knows it."
What do you know that Forbes and others are missing?
You can PM me if it's a trade secret ;-)
Got that right. The last time anyone from Congress was allowed to view the vault was 1974!!! Its true
“...increased the number of inches in a foot from 12 to 15: “Home buyers will thus get more house for the same price..”
I’m no math wizard, but wouldn’t you get less square footage?
“..something tangible needs to back the currency.”
It used to be backed by America’s strength, security and honor. Not any more.
Very interesting proposal! (I’m also a US Navy Vet)
Top gold reserves: http://en.wikipedia.org/wiki/Gold_reserve
The data is a year old, but it gives you an idea what countries are well positioned in the future. Something to consider, there are countries on the list that are on the verge of going bankrupt. The US should position itself to “bailout” those countries by providing US dollars in exchange for gold, preferably below market price. I’ll take buying gold over welfare spending any day of the week and twice on Sundays.
My choice would be weapons grade plutonium (Pu239). Preferably assembled into W88 warheads ready for delivery to answer requests for foreign aid. I also favor restricting suffrage to military veterans and property owners.
Regards,
GtG (slightly to the right of Attila the Hun)
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