The dollar is a fundamentally damaged currency, and a return to the gold standard represents the best solution, says James Grant, editor of Grant’s Interest Rate Observer.
“A proper gold standard promotes balance in the financial and commercial affairs of participating nations,” Grant writes in The Wall Street Journal. “The pure paper system promotes and perpetuates imbalances.”
Investors around the world are losing faith in the dollar, he points out.
“It's not that the dollar is overvalued — economists at Deutsche Bank estimate it's 20 percent too cheap against the euro,” Grant says.
See David Skarica's Top Gold Stock Picks for 2009 — Click Here
“The problem lies with its management. The greenback is a glorious old brand that's looking more and more like General Motors. . . . The dollar is faith-based. There's nothing behind it but Congress.”
Grant has harsh words for Federal Reserve Chairman Ben Bernanke.
“You get the strong impression that Mr. Bernanke fails to appreciate the tenuousness of the situation, fails to understand that the pure paper dollar is a contrivance only 38 years old.”
The U.S. abandoned the gold standard in 1971. “The experiment may yet come to naught,” another point Bernanke is missing, Grant writes.
Investment guru Jim Rogers is a doomsayer for the greenback too.
“The U.S. dollar is now a terribly flawed currency,” he told the Australian Broadcasting Corp.
“The U.S. . . . is the largest debtor nation in the history of the world, and that's going to continue to cause problems.”
© 2017 Newsmax. All rights reserved.