Posted on 07/02/2019 10:04:55 PM PDT by NRx
In tapping Judy Shelton to become one of two Federal Reserve Board governors, President Donald Trump selected one of the minority of mainstream economists supportive of a return to the gold standard and critical of central bank activity.
Shelton, who serves as the U.S. executive director at the European Bank for Reconstruction and Development, wrote as recently as last year in support of pegging the dollar to gold prices.
Trump announced his intention to nominate both Shelton and St. Louis Fed economist Christopher Waller via tweet on Tuesday.
Shelton’s unorthodox monetary beliefs will likely draw questions from Senate lawmakers, who will ultimately need to approve Shelton and Waller to the Fed board.
In a post published by the libertarian think tank Cato Institute in 2018, Shelton drew a comparison between cryptocurrencies and gold.
“If the appeal of cryptocurrencies is their capacity to provide a common currency, and to maintain a uniform value for every issued unit, we need only consult historical experience to ascertain that these same qualities were achieved through the classical international gold standard,” she wrote.
“In proposing a new international monetary system linked in some way to gold, America has an opportunity to secure continued prominence in global monetary affairs.”
(Excerpt) Read more at cnbc.com ...
“I heard the JFK attempted this. “
He didn’t.
What about inflation? The Fed won’t be able to reign in growth to combat inflation anymore. A disaster!/s
“Remember when France raided our Gold supply? I always wondered why we didn’t just thank them for the payment on their war debt and keep the Gold. “
They might have sent us a bill for borrowing their navy and marines during our Revolution.
In the ‘60s the French were reacting rationally to our Triffin Dilemma problem caused by making the dollar the reserve currency at Bretton Woods. Keynes had predicted this problem and recommended creating the “bancor” for use in international trade.
And all the people said AMEN!
This is not the classical gold standard which requires convertibility upon demand.
Shelton appears to be calling for a gold peg, which IIRC is something that Paul Volcker was using when he chaired the Fed. What Shelton is proposing doesn’t sound very controversial.
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Here’s some more info on Shelton.
She’s adopted an old idea by Greenspan to issue a gold backed bond similar to TIPS. The purpose is to stabilize the foreign exchange market and discourage manipulation.
For dollar policy she favors a market approach, rather than the Fed’s current system based on their fake claim that economic growth causes inflation.
http://www.freerepublic.com/focus/f-news/3761577/posts
Yes, I am not totally sold on the gold standard, but any return to an honest money policy would be golden. Instead of the fiat, expansionist monetary policy followed by the world since Nixon.
Oh, it will be a battle. Banksters around the world will make sure it doesn’t happen - I wouldn’t put anything, even murder, past them to keep the system that benefits them and Wall Street investment firms.
Current system is government sanctioned theft by banks.
It’s the most effective way to stabilize the currency and prevent rampant inflation.
Didn’t the British losses in WWI cause the pound to lose its power specifically because the cost of war drained their reserves.
That was one of the reasons I say there has never been a true Gold Standard. If truth is the first standard to go in a war then convertibility is the second.
What is the name of the book?
Didn’t they reclaim the gold we were holding for them? Can’t have a “raid” which just takes back what is theirs.
There is no such thing as “fiat” currency. Currency values are determined by what it can purchase. Currency is more a “faith” currency than a “fiat” currency.
Money supplies cannot be held static without being a drag on economic expansion. Gold supplies cannot expand rapidly enough to foster growth and not to do so would be politically impossible anywhere in the world.
Can you imagine using gold to pay a ten dollar bet? Would be about 135th of an ounce. Unless you are considering paying with gold dust or beads of gold, the idea is ridiculous.
They day of gold and silver as a monetary base is over never to return.
The book is “When Washington Shut Down Wall Street” by Wm Silber, a title which obscures how much it deals with money and banking and how the classical gold standard worked. I think you will find it very interesting.
“Didn’t the British losses in WWI cause the pound to lose its power specifically because the cost of war drained their reserves.”
Their decision to return to pre-war “parity” is something that usually crops up in discussions of why England lost its central role in world finance. The process of returning the Pound to its pre-war value was very deflationary. IIRC Keynes had warned against trying to return to the pre-war value.
So England’s unwise decision to return to parity was part of the reason, but another was the aggressive and ultimately successful move by the Wilson administration to turn the dollar into a major world currency. A lot of the credit for that appears to belong to Wilson’s Treasury Secretary William McAdoo. It seems to be another case of the right man at a propitious time, just like with Alexander Hamilton.
Yes just paper the Fed prints at leisure to interfere in the economic progress. That it would retard growth is a bankster lie.
Yes and I reject the idea you NEED monetary expansion. I believe in Venice, it was illegal to not hold the deposits of gold. The bankers made money with service fees, NOT state sanctioned theft.
That is simply false, as our history clearly shows.
You did not address the issues I raised. Issues which will ensure that gold never again becomes a major monetary instrument.
What is also clear is that those advocating a “gold standard” have not seriously and thoroughly considered what such a switch would entail.
They don’t understand the dynamics of such a change and wishful thinking won’t avoid the problems it involves.
Gold is nothing more than a pretty metal to all but the superstitious.
ps
medicine no longer depends upon bleeding as a cure.
“Venice?”
Gold doesn’t leave banks, if they have it, for ordinary transactions. That is why the draft and check were developed, mainly by the Medici of Florence, in order to allow large foreign trade prevented by the requirement of financing traded with physical gold.
Without this development of credit the world’s economy would be much smaller, the people much poorer and political struggles even more intense. Socialism would probably have triumphed across the world and Lord knows it is close enough even without gold.
It is important to remember that gold does not produce a rate of return, a rate of return which allows one to buy gold.
Gold is not anti-inflationary either. Look at prices around a mining camp. The gold taken from the New World set off a century long inflation throughout Europe.
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