Who Else Besides Ron Paul Wants To Return To The Gold Standard?
I would like to pass along an anecdote reported by SmartMoney's Donald Luskin in a 2002 interview of Ron Paul. Paul told Luskin the story of his owning an original copy of "Gold and Economic Freedom," (which I reference above) and asking Greenspan to sign it. While doing so, Paul asked him if he still believed what he wrote in that essay some 40 years ago. That tract, written during Greenspan's days as a devotee of Ayn Rand, is a strongly worded, no-holds-barred attack on fiat money and the central banks as an engine of the welfare state. It also endorses the gold standard as a deterrent to politicians' penchant for running deficits and printing money. Greenspan -- enigmatic as ever -- responded that he "wouldn't change a single word."
Answer:
Personally, I think the USA will return to the gold standard in the not distant future. The FED has so overproduced dollars, and in the process has created the rarely seen economic anomalies we are witnessing today. Inverted interest rates, a contrived housing boom and excess liquidity are just a few of the problems. Alan Greenspans conundrum over interest rates is a dilemma he produced when he had the FED money machines running 24/7. The American people will pay dearly for his elitist overindulgences.
The problem would have become apparent much sooner had the US dollar not been the reserve currency of the world. Now that we have blanketed the world with dollars, the end to our sacred dollar fiat currency is at hand.
The world community is seeking alternatives to the dollar as is witnessed by the devalued dollar. When the deluge of dollars is ultimately dumped on the USA and hyperinflation becomes a reality, we will have no choice but to return to a gold backed currency. In the meanwhile, it would behoove every American to invest in gold less our meager savings are completely eroded by the dollar machines.
I don't care about your question, but ron paul is the best candidate!
Did you ask a question that you answered yourself? Yes you did. But I will comment on it nonetheless.
Ron Paul is an idiot... There, I said it, let the flaming being. But for real. I do not doubt that Alan Greenspan would have loved a gold standard, he was quite the libertarian. Here is the important part though, the part that you are completely missing, HE WOULDN'T HAVE ACTUALLY ADVOCATED IT. Not only because it would mean the end of his job, but also because it is completely unrealistic. There are many things I have said and written, things I would never back down from, but that does not mean that I actually believe they should ever happen. There is a difference between having ideals and actually thinking they are practical.
The adoption of a gold standard is a fairy tale. Not in the sense that it couldn't be done, but in the sense that it would ever actually work.
the problem with going back on the gold standard is that it would kill the huge economic growth this country has had since the 1970's when nixon took us off the gold standard. why? because then our currency would be tied to the value of the gold in fort knox, and that then means that money would have to be removed from circulation. when you do that, you slow the economy down. in the short term it might be good, but long term, no good. when nixon took us off the gold standard, our economy reacted way too fast, and we had double digit inflation rates, and moderately high interest rates. nixon then instituted a wage and price freeze to curb inflation, but business worked around them. when ford took over, his ideas were pushed aside by many, and then carter took over and got a tax increase through congress that slowed the economy even further, interest rates went up, the economy slowed even further. but it still grew faster than if we were on the gold standard. ron paul, he is an idiot.
I don't have my copy of Capitalism: The Unknown Ideal with me, but I remember that Nathaniel Branden was the author of the article that convinced me of the importance of the gold standard. Greenspan wrote other articles in that book.
Besides Rand, Greenspan, Branden, and other Objectivists (at the time of their writing), I suggest you read Austrian school writers such as Ludwig von Mises. (Rand recommended him, which is where I started.)
I don't know of any actual politicians in office who advocate the gold standard. Republicans tend to be Keynesian or Monetarist. Libertarians tend to be Monetarist or Austrian, so you should find a number of gold standard advocates among the latter.
Ron Paul doesn't understand economics well enough to understand why we can't go back on the gold standard. He is a little more off his rocker than other politicians. At least most others know when to keep their mouths shut when they have limited knowledge. There's a reason that nations no longer use this standard. An economy will have limited liquidity if the nation's currency is directly tied to a physical asset like gold.
We're not in the 1700s or 1800s anymore. Now there are too many goods and services, and things move too quickly and change too quickly within a given economic structure for a market's liquidity to be limited by the gold standard. The value of a given nation's currency is now tied to factors such as the stability of that nation's government and the worldwide desirability of goods/services produced by that nation. These barometers are better than gold.
What really needs to happen (instead of a return to gold fever) is that the US needs to restructure the poisonous, one-sided trade agreements that it has with Asia, Europe, South America...basically everyone! We subsidize economic prosperity all over the world. China is not a communist nation enjoying capitalistic success. China is a communist nation whose economic success is subsidized heavily by capitalistic nations. Manufacturing needs to make a comeback. The CEOs and execs have to be reigned in; limits have to put on their salaries based on market caps. Corporations are government subsidized entities, and they should be controlled as such.
Until politicians start seriously addressing real issues such as those above, we will keep debating gimmicky nonsense like the possibility of a return to the gold standard. Paul is out of his mind and/or grossly misinformed.
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