Monetarists call for return to the gold standard to stabilize world currencies

As the world’s, especially the West’s, economies careen wildly between inflationary and deflationary trends, conservative hard-money proponents are predicting or announcing the demise of the dollar as the de facto reserve currency and pushing for the return of some kind of modified gold standard, or gold-silver standard, to stabilize economic fluctuations. In a column for Forbes magazine,

Ralph Benko writes

The world dollar standard’s death certificate arrives in the mail this week. The Bank of England— one of the most staid, cautious, and dignified entities in the world of monetary policy — signals that the fiduciary currency standard ushered in on August 15, 1971 is, empirically measured, far inferior to the (dilute form of the) gold standard erected at Bretton Woods.

The Bank of England’s Financial Stability Paper No. 13, Reform of the International Monetary and Financial System, reported at Bloomberg BusinessWeek and reviewed here, is being seen by many monetary policy observers around the world as the “coroner’s report” on the death of the world dollar standard.

In the second half of 2011 monetary policy scholars, policy virtuosi, financiers and activists have issued over half a dozen books and important monographs on the very subject heralded by Forbes whose call was seconded by Heritage’s president, Dr. Ed Feulner in an influential Washington Times op-ed:

That’s why we should welcome a debate about the role of the Fed and what our monetary policy should be. But we have to ask the right questions. … Should we fix the dollar price of gold? … ‘If the defect is inflation and an unstable dollar,’ asks Lewis Lehrman of the Lehrman Institute, ‘what is the remedy?’ We can’t answer that without a robust and full discussion. Let’s hope the hard questions being asked now about the Fed touch off a much-needed debate.

Earlier this autumn, Lewis E. Lehrman published the fruit of 40 years of study and thought, study that began with his tutelage by French monetary statesman Jacques Rueff, of The True Gold Standard — A Monetary Reform Plan Without Official Reserve Currencies. Other noteworthy works on how to restore the gold standard promptly followed.  Financial analyst James Rickards’ Currency Wars: The Making of the Next Global Crisis is receiving significant popular attention and bestseller status, Detlev Schlichter’s Paper Money Collapse, and we see the publication of Paul Nathan’s The New Gold Standard, a new edition of prominent libertarian Dave Redick’s Monetary Revolution USA and, now, the keenly anticipated Fixing the Dollar Now: Why US Money Lost Its Integrity and How We Can Restore It by Judy Shelton.

The world dollar system has been pronounced, now almost officially, a failure. The main surprise is that the pronouncement took so long.

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