Tags: Judy | Shelton | Gold | standard | us | economy | dollar

Judy Shelton: Time to Go Back to Gold Standard

Tuesday, 26 Jul 2011 08:21 AM

It’s time to take seriously a return to the gold standard, argues Judy Shelton, senior fellow at the Atlas Economic Research Foundation and co-director of the Sound Money Project.

Ordinary Americans get it about the seemingly exotic world of global currencies, she writes. They see the Federal Reserve printing dollars out of thin air to support the foundering U.S. economy and it has them worried, Shelton writes in an Op-Ed in The Weekly Standard.

As the Tea Party pushes the GOP toward a showdown on the debt ceiling, remember that they are responding to messages enunciated by potential 2012 candidate Sarah Palin, who called for a stable dollar in November.

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(Associated Press photo)
“Though it’s odd to think that the objectives of the Tea Party conservatives for whom Palin speaks might coincide with the concerns of the global elite who read the Financial Times, there is a thread that unites them,” Shelton writes. “It’s the realization that the world economy cannot take another devastating boom-and-bust cycle.”

Going back to gold — President Richard Nixon ended the gold standard in 1971 — means instilling discipline back into the fiscal and private credit systems that Congress and the banks seem unwilling to provide, Shelton writes.

“Gold provides a self-correcting mechanism for irrational exuberance; as credit begins to flow too freely, as equity values or commodity prices appear frothy, the astute observer at the margin cashes out in gold. Monetary central planning gives way to the aggregate wisdom of the free market,” she writes.

The U.S. dollar hit a four-month low against the Swiss franc and fell against the yen as traders nervously watched the debt-ceiling debate drag on into Monday, Reuters reports.

Still, analysts said that they expected some sort of deal to emerge before Aug. 2, the date the U.S. Treasury says it will run out of cash to pay bills and potentially begins to default.

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It s time to take seriously a return to the gold standard, argues Judy Shelton, senior fellow at the Atlas Economic Research Foundation and co-director of the Sound Money Project. Ordinary Americans get it about the seemingly exotic world of global currencies, she writes....
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2011-21-26
Tuesday, 26 Jul 2011 08:21 AM
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