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Saturday, October 29, 2011
A Prudent Federal Reserve System
President Nixon severed our last link with sound money in 1971, when he arbitrarily took the United States off the Bretton Woods version of a gold standard.
President Franklin Roosevelt began abandonment of prudence in 1933, when he arbitrarily reneged on contractual promises that Federal debts, including paper currency, had to be paid in gold at the holder’s option (see How FDR Destroyed the Dollar). Until 1933, the U. S. dollar was the among the strongest and most stable currencies in the world. With the stroke of a pen, President Franklin Roosevelt torpedoed it. We are still plagued with the resulting inflation.
The Fed’s number one responsibility ought to be insuring a sound dollar. And a gold standard is the surest way to do that.
The Fed, however, must entirely abandon its hubristic, and humanly impossible, presumption of managing the economy and preventing unemployment.
Recreating A Real Gold Standard
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