Posted on 12/10/2010 6:48:02 PM PST by Tolerance Sucks Rocks
Jeffrey Bell, a two-time campaign adviser to Ronald Reagan, says it’s high time that the United States return to the gold standard, abandoned by President Richard Nixon in 1971. He cites Reagan as a proponent of the monetary regime and squarely blames current Federal Reserve Chairman Ben Bernanke’s policies for the ongoing global economic stagnation.
Bell is policy director of the American Principles Project. He served as an issues adviser in Ronald Reagan’s 1976 and 1980 presidential campaigns and was the Republican Party’s nominee for the U.S. Senate in New Jersey in 1978.
Bernanke’s policies — extremely low interest rates and flooding the system with unneeded dollars — are feeding stagnation and making our debt problems worse, Bell tells Newsmax.TV.
“Right now, Ben Bernanke, the chairman of the Fed, is printing dollars. He’s really just summoning them up from cyberspace, out of a computer,” Bell says.
“If he had to know that each dollar was something of independent value, backed by gold or some other commodity — preferably gold — it would be much harder for the United States to borrow all this money it does from foreigners in order to finance huge budget deficits.”
Since rates are at zero, Bell says, nobody can tell what shape the economy is in or how long rates will stay low. The longer we stay at artificially low rates through money printing, the more the confusion grows, Bell maintains.
“I think that’s a big threat to the world economy’s sense of confidence,” Bell says.
Bernanke has gone on the offensive, appearing on “60 Minutes” to defend the Fed's $600 billion bond-buying plan. During the interview, he suggested that a third round wasn't impossible.
(Excerpt) Read more at moneynews.com ...
I heard this week the gold in Ft. Knox and all USA gold reserves by accounting rules is valued at $42.00 and ounce.
If true based on golds current value - it might be worth something.
I just sold an ounce on ebay last week for 1410.00USD.
I just sold an ounce on ebay last week for 1410.00USD.
How do we even know if America actually HAS any gold?
Abandoned by FDR in 1933.
Supposedly we did once according the Secrets Of Fort Knox.
Very true!Audit comes into mine to me.
Man I hope that's not what America's vaults look like!
Between the Komrades Klintons and 0, I wouldn’t totally rule it out, just keep it at the end of extreme possibilty.
We can’t go back to a ‘gold’ system.
1) There just ain’t enough gold in them there hills to back our currency use and debt.
2) It is possible that much of the gold we have, and other countries have, is gold-plated tungsten. Going to a gold backed system would mean there would have to be verification of all gold reserves, and the authenticity of the gold bars. If found to be ‘fake’, you can see what that would do to the ‘system’.
3) World bankers couldn’t rape the U.S. citizenry if it weren’t for us having to borrow everything from them. They don’t want us to have a gold backed system. They don’t want to lose control of the US and it’s assets.
So guess who wins ?
Are you sure there is any gold in Ft. Knox ?
America is the “Land OF OZ” built on a side show of politicians/BS artist.
FDR abandoned conversion of dollars by private individuals. The dollar was still convertible among central banks until Nixon.
Yeah, Well Clinton gave the Chinese the targeting technology to accurately hit our cities for a $100,000 campaign contribution so how secure do you think the gold is?
Serious question
True,what gold,no one has seen it for years.
I have a question.
If our currency is not backed by gold, then who owns all the gold (if there is any) in Ft. Knox?
If it were possible for the typical bank to get through an all-out bank run unscathed, then the gold standard would be a good idea. But, unfortunately, deleveraging of the fractional-reserve system combined with a gold standard would lead to an all-out deflation. There's only one way to adjust debt levels to a lower price level: default. The 1930s stand out as an example of what happens when fractional-reserve deleveraging meets the gold standard.
Nowadays, I think it would be worse because the debt levels are a lot higher now than they were in 1929.
On the other hand...bankruptcy ain't what it used to be. Instead of the all-or-nothing option, it's not uncommon to reschedule. If the bankruptcy laws were amended to allow for an automatic rescheduling in the case of deflation, by the amount of the CPI droppage, it would contain a deflationary implosion because debt levels could be lowered along with the price level.
Example: if prices drop by 5%, the borrower has the option of imposing a 5% haircut on the principal and/or the interest payments required. It's not exactly the flipside of an adjustable-rate loan, but it's close.
Granted that such an amendment partakes of pick-on-the-creditor, and it would lead to higher rates to compensate for deflation risk, but it would well prevent massive defaults in an environment where the borrower is obliged to pay back in dearer dollars - and the consequent push to all-out defaults.
"Deflation rescheduling" would take much of the risk out of going back to a gold standard in a fractional-reserve environment by acting as a somewhat-painful vaccination against an outright credit implosion.
“There just ain’t enough gold in them there hills to back our currency use and debt.”
You misunderstand how a gold standard works. Dollars simply have to be convertible into gold at a fixed rate. Gold doesn’t have to back each dollar in existence.
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