Thursday, August 6, 2020
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Get Ready For a Push to Return to the Gold Standard

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At first it was only Ron Paul (R, TX), the fringe libertarian Congressman who talked seriously about a return to the gold standard. Since the Wall Street meltdown and the Great Recession, however, we have heard a growing chorus of politicians (mostly right-wing), and conservative economists floating the idea of a return to the gold standard as the solution to rising federal deficits and the jobless recovery. Various bigwigs like World Bank President Robert Zoelick, Warren Buffet's father Howard Buffet, and Kansas Federal Reserve President Thomas Hoenig all have made statements supporting a return to the gold standard, but nothing has been so remarkable as hearing Alan Greenspan, in an interview on Fox Business, say:
We have at this particular stage a fiat currency which is essentially money printed by a government and it's usually a central bank which is authorized to do so.  Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard.

Even more stunning was hearing Greenspan question whether or not we even need a central bank (i.e., the Federal Reserve); he also claimed that the housing bubble was not his fault, if anything, it was "the Fed's," as if he himself was not really "the Fed" at the time.