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Is a State Run Gold Standard Really the Answer?

from The Daily Bell

Republicans eye return to fixed value for dollar … The Republican Party is set to call for the creation of a commission to look at possible ways to set a fixed value for the dollar, 40 years after President Richard Nixon ended its link to gold. A draft of the party platform to be adopted at the Republican National Convention next week in Tampa, Florida, ties the plan to “cleaning up the wreckage” of President Barack Obama’s policies. The proposal recalls a commission created in 1981 by President Ronald Reagan to consider restoring the convertibility of the dollar into metal. The commission advised against such a move in the end. “Now, three decades later, as we face the task of cleaning up the wreckage of the current administration’s policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar,” the platform would say, according to draft language provided to Reuters by a Republican National Committee official who declined to be named. − Reuters

Dominant Social Theme: Gold is good. And if Leviathan is setting the price so much the better …

Free-Market Analysis: The problem with a state run gold standard is that the state is running it!

Facetiousness aside, this article gives us the opportunity once again to analyze what a gold standard really is and how a free-market one might work. It is probably safe to say that whatever the GOP comes up with will be less free and thus less adequate than what is called for.

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