Newt for gold standard? Would it work? Nadler
Posted: Mon Jan 23, 2012 7:21 pmSpeaking of policies of the monetary kind, would-be US President Newt Gingrich has indicated that he would lean towards creating a committee to study the feasibility of a return to the gold standard by the US. Aside from perhaps having been to too many New Orleans-based hard asset investment conferences, and possibly taking monetary policy advice from certain dollar-morticians (who are thought to still be working for Ron Paul’s campaign), Mr. Gingrich’s golden scheme unfortunately does not turn out to be as good…as gold. Nothing new under the sun here; we have often seen and heard politicians promising the moon and the stars to prospective voters, irrespective of the quasi science-fiction flavor that their visions entail.
To wit, Marketwatch political watcher Jeff Bartash remarks that: “Returning to a gold standard now, however, is virtually impossible. Aside from Ron Paul, a gold advocate, few politicians in Washington support the idea. Nor do the vast majority of economists. There’s even less support overseas.
Governments don’t want to be limited in the amount of money they print by a source of metal that’s in short supply. If the U.S. went back on a gold standard, the government probably would have to set the exchange rate at an extraordinarily high level, potentially damaging the economy in the short run.
Otherwise other nations such as China would quickly exchange their excess dollars for gold and drain the bullion out of Fort Knox, where much of the nation’s yellow metal is stored.
To wit, Marketwatch political watcher Jeff Bartash remarks that: “Returning to a gold standard now, however, is virtually impossible. Aside from Ron Paul, a gold advocate, few politicians in Washington support the idea. Nor do the vast majority of economists. There’s even less support overseas.
Governments don’t want to be limited in the amount of money they print by a source of metal that’s in short supply. If the U.S. went back on a gold standard, the government probably would have to set the exchange rate at an extraordinarily high level, potentially damaging the economy in the short run.
Otherwise other nations such as China would quickly exchange their excess dollars for gold and drain the bullion out of Fort Knox, where much of the nation’s yellow metal is stored.