There was a movie released when my wife and I were newlyweds titled, “McKenna’s Gold.” It starred Gregory Peck, Omar Sharif, Edward G. Robinson and a host of others. What makes it relevant to today’s post is the theme song, “Old Turkey Buzzard,” that has a refrain of, “Gold, Gold, GOLD!”
The trigger for all this is an article that appeared in the Financial Times.
Republicans eye return to gold standard
By Robin Harding and Anna Fifield in Washington
The gold standard has returned to mainstream US politics for the first time in 30 years, with a “gold commission” set to become part of official Republican party policy.
Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar
The move shows how five years of easy monetary policy – and the efforts of libertarian congressman Ron Paul – have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate.
Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the platform committee, said the issues were not adopted merely to placate Mr Paul and the delegates that he picked up during his campaign for the party’s nomination.
“These were adopted because they are things that Republicans agree on,” Ms Blackburn told the Financial Times. “The House recently passed a bill on this, and this is something that we think needs to be done.”
The proposal is reminiscent of the Gold Commission created by former president Ronald Reagan in 1981, 10 years after Richard Nixon broke the link between gold and the dollar during the 1971 oil crisis. That commission ultimately supported the status quo.
“There is a growing recognition within the Republican party and in America more generally that we’re not going to be able to print our way to prosperity,” said Sean Fieler, chairman of the American Principles Project, a conservative group that has pushed for a return to the gold standard.
There’s much more at the Financial Times. I urge you to follow the link and read it in its entirety.
I remember when Nixon removed the last link to the Gold Standard during the 1971 oil crisis. Nixon was no financial conservative. He instituted wage and price freezes reminiscent of FDR’s failed schemes. The immediate result was a spike of double digit inflation and skyrocketing interest rates. My wife and I bought our first new car during this period with a double-digit interest rate…and we were glad to get a low one via our USAF credit union.
We have been off the gold standard for forty years. I’m not a financial wizard. I don’t know how moving back to that standard would affect our economy. Especially now that I’m on a fixed income. There’s also the question whether sufficient gold exists to meet our economic needs.
This is one question I have no competence. I admit the possibility is intriguing. My one concern would be if that gold-standard link to our currency makes our economy a zero-sum game.
There is a finite amount of gold available in the world. Yes, it would make gold mining viable again at a much larger scale. Still, I don’t think there is enough. On this planet anyway.
Supposedly, the asteroid belt is a fractured planet that just never came together. If there was gold, silver and other valuable metals of the platinum group, would that spike another gold rush? Maybe I should invest in Space-X and Burt Rutan’s enterprises?
Gold, Gold, Gold! Hitch your wagon to Space-X and be a prospector out of Ceres! L. Neil Smith will bust a gut laughing to have been vindicated.