U.S. Republicans introduce gold standard de
I am not holding my breath over the Republicans’ plans for another gold commission to investigate the possibility of returning the USA to a gold standard in the case of the Romney-Ryan ticket winning.
Of course, I like the Classical Gold Standard, which existed from about 1880 to 1914, and I am convinced it was a humongous mistake to do away with it, a mistake that was further compounded by the abandonment of its weak successor, Bretton Woods, in 1971. And you know what I think of our present unconstrained fiat money system: It is suboptimal, unstable and unsustainable. It is fundamentally incompatible with capitalism, and it has now amassed so many colossal imbalances, from overstretched banks to a gigantic and never to be repaid public debt load, that it is firmly beyond repair. It is in its endgame.
But I don’t believe the best solution would be to go back to a government-run gold standard. We should not trust politicians and bureaucrats with money, certainly never again with entirely unconstrained fiat money, but probably not even with a monetary system that comes with the strait jacket of an official gold standard. I would argue instead for the complete separation of money and state, and for an entirely private monetary system.
Let the market decide what should be money and how much there should be of it. I do strongly believe that gold would again play an important role in such a system. After all, gold and silver have been chosen forms of money for thousands of years, in all cultures and societies. That is what the trading public always went for when it was free to choose.
Nevertheless, I would agree that even an ‘official gold standard’, such as the US had before 1933, and in particular before the Federal Reserve was established in 1913, would still be much better than anything we have today. But the chances of such a system being reintroduced are slim.
Political obstacles are immense