Literally: For most of the United States' existence, the value of dollar had been tied to gold. That ended in 1971, when President Richard Nixon decided that the dollar could no longer be converted, at a fixed rate, into gold. But now, 40 years after abandoning what's known as the gold standard, fears over a falling dollar—both due to America's debt and the recent fiscal indecision of its leaders—may be giving gold, and its advocates, like GOP presidential contender Ron Paul, a new shot.
The price of gold has risen steadily for at least the past decade. At the start of July 2001, according to precious-metals dealer Kitco, the spot price for New York gold was at around $265 per ounce. In contrast, at the beginning of this month it was nearly six times that at $1,544 per ounce. And now, after last week surpassing the $1,600 mark for the first time in history, the market price of gold is close to $1,620 per ounce.
It's safe to say that the fight over the debt ceiling in Washington has had something to do with that, says Mark Calabria, senior fellow of economic regulatory studies at the libertarian Cato institute. "Underlying the dollar ultimately is faith in not just the Federal Reserve, but also faith in the fiscal situation," he says. "There really is a sense that if the United States doesn't get its house in order, it's going to debase the dollar. So, you're going to see flight to these alternatives, like gold."
While a bullish run on gold doesn't directly mean a bullish attitude toward a renewed gold standard, some economic experts suggest that it could raise the profile of such ideas, especially as trust in the dollar declines. According to Lewis Lehrman, chairman and founder of the Lehrman Institute, a research organization which advocates for the gold standard, since abandoning the gold standard, the high rate of inflation and the depreciation of the dollar have raised doubts about the stability of the current monetary system. Gold, he says, is the "least imperfect currency" out there. "The whole paper credit money system has failed to protect those who are most vulnerable--which is to say, those on salaries, wages, fixed incomes. The nimble, speculative classes on Wall Street are generally in position to keep ahead of inflation, but those who are not insiders are at a profound disadvantage and have grown poorer as a result," he says.
George Gilder, whose new book publishes today, is one of the original pillars of Supply Side economics. As stated by Discovery Institute, which he co-founded, “Mr. Gilder pioneered the formulation of supply-side economics when he served as Chairman of the Lehrman Institute’s Economic Roundtable, as Program Director for the Manhattan Institute….”
He was the living writer most quoted by President Reagan. And he is back with his most brilliant work yet — one of potentially explosive importance if taken to heart by our political and policy thought leaders. It is a radical guide, with surprising insights on almost every page, to the creation of a new era of vibrant prosperity.
As reviewer Paul Brodsky, a professional investor in New York City, perceptively notes,
"Lewis Lehrman is one of a very small group of contemporary gold advocates able to successfully bridge the gap separating practical conservative intellectualism from fleeting, half-baked idealism. His CV lists great success across many fields including education (degrees and teaching fellowships from Yale and Harvard); industry (past president of Rite Aid); politics (narrow loser to Mario Cuomo in the 1982 New York governor’s race); finance, (past Morgan Stanley managing director); private sector entrepreneur (founder, L. E. Lehrman & Company); public sector advocate (founder, Lehrman Institute); historian (author, Lincoln at Peoria: The Turning Point); and recognized philanthropist (awarded the National Humanities Medal by George W. Bush in an Oval Office ceremony). ... Only someone erudite and elegant in demeanor could hope to pull it off . In an irreconcilably over-leveraged world where irritated bond vigilantes question economic sustainability and angry Tea Partiers protest the immorality of it all, Lehrman’s views are considered and his convictions carry weight. He brings gravitas to his cause, and he does so from within as a member of the club."
Before the Fed: JP Morgan Summons the Bank Presidents
"Finally, on the night of Sunday, November 2, Morgan summoned the presidents of the major New York banks to his new library, at the corner of Madison Avenue and Thirty-sixth Street, an Italian Renaissance-style palace he had built next door to his house to showcase his collection of rare books, manuscripts, and other artwork. Its marble floors, frescoed ceilings, walls lined with tapestries and triple-tiered bookcases of Circasian walnut, crammed full of rare Bibles and illuminated medieval manuscripts, made it an incongruous setting for a meeting of the banking establishment. Once the moneymen had gathered, Morgan had the great ornamental bronze doors to the library locked and refused to let anyone leave until all had collectively agreed to commit a further $25 million to the rescue fund."
— Liaquat Ahamed, Lords of Finance (Penguin Books, 2009, p. 54)
Lately we have been engulfed by headlines reporting financial turmoil on every continent, in almost every nation, large and small. The commissars of central planning who so marred the history of the 20th century have been replaced by central banks in the 21st. In Cyprus, the new leadership now dares to confiscate citizens’ wealth with a one-time tax of up to 60 percent on bank deposits above 100,000 euros. Self-interested prime ministers blame continental monetary policies for instigating the currency wars that they themselves surreptitiously carry on.
Constitution.org provides an extensive and thoughtful Memorandum of Law by Larry Becraft, Esq., of Huntsville, Alabama, on Article I, Section 10, clause 1 of the US Constitution.
Sir William Blackstone courtesy of Wikipedia
One of many interesting matters the Memorandum treats is Blackstone's Commentaries, a book that was a fixture in the...
The value of the yuan has been slowly rising. The value of the Japanese yen has been sharply falling. Abenomics is attempting to reflate the Japanese economic – slowly, slowly. “Japan is back!” Prime Minister Shinzo Abe tells the Japanese.
Coming back isn’t easy. The Financial Times’ Jonathan Soble has noted...