You know Your Survival Guy thinks a gold standard would bring discipline to the government, and save the dollar. So what’s the holdup? If it’s such a great idea, why isn’t America reinstituting the gold standard today? At Forbes, John Tamny explains that it’s economists who are the barrier. He writes:
Economists in particular dismiss the gold notion for obvious, easy-to-discredit reasons. For one, they claim a dollar tied to gold would limit so-called “money supply.” No, not true. The only limit to money in circulation is production. Money is an effect of production (that’s why there’s so much in Palo Alto, CA, and so relatively little in El Monte, CA), and it’s always where production is.
This would be even truer with a dollar pegged to gold. If anything, dollars circulating would skyrocket to reflect the happy fact that savers would no longer need to hedge their currency exposure in wealth that already exists (think hard assets like land, rare art, housing, and – yes – gold), and would instead feel freer to invest in equities representing wealth that doesn’t yet exist. Under such a scenario, production would rapidly increase as would dollars facilitating same. Markets at work.
Still others claim all the debt would make a gold standard a non-starter, that the debt itself has only been possible without a gold standard. Quite the opposite. The national debt is just income streams in dollars months, years and decades in the future. If the dollar were more credible thanks to a gold definition, interest in Treasury income streams would be much greater.
Which brings us to economists. They don’t want a gold standard precisely because money with a strict definition via gold would render their raison d’etre anything but. Even allegedly “free market” economists (see the laughable “market monetarist” religion within the PhD crowd) see a “wise” central planner when they look in the mirror, thus the alleged “impossibility” of a gold standard. Call the presumed impossibility of a gold standard a full employment act for economists.
Action Line: America doesn’t need central planners, for the economy or the dollar. Hard money is the basis for wealth preservation and confident decision making, and gold is the ultimate in hard money. When you want to talk about gold in your portfolio, email me at ejsmith@yoursurvivalguy.com. Click here to subscribe to my free monthly Survive & Thrive letter.
