“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


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Monday, April 25, 2011

Wall Street Journal Editorial calls for a Return to a Gold Standard

The Wall Street Journal is in exceptionally fine form in Tuesday's edition. The headline from the commentary says it all:

Monetary Reform: The Key to Spending Restraint


This is no small development. Although it does not reflect the view of the editors of the paper itself, since it is an editorial written by a Mr. Lehrman, of the Lehrman Institute, I find it extremely noteworthy that an article calling for a return to a gold standard would actually grace the pages of that prestigious leading financial newspaper. The WSJ is not a "Wild West" newspaper but is an establishment periodical, which is why I was quite surprised to see an article of this nature.

Perhaps the paper will find room to allow for some other writer to make a case against a gold convertibility statute, but for now this just goes to show that the debt crisis that is engulfing our nation is resulting in serious discussion about the role of gold in any future monetary system or in the current system.

My own personal view is that the first nation to do so will end up being the winner as its currency will be the strongest, assuming of course it takes the necessary steps to get its financial house in order.

The author correctly notes the following:

Unrestricted convertibility of the dollar to gold at the statutory price restricts Federal Reserve creation of excess dollars and the inflation caused by Fed financing of the deficit".

I urge you to read the entire commentary which can be found here.

http://online.wsj.com/article/SB10001424052748703983704576277431813826152.html?mod=WSJ_Opinion_LEFTTopOpinion


Also, additional information about the Lehrman Institute can be found here:

http://www.lehrmaninstitute.org/lehrman/index.html


Also, while you are at the Wall Street Journal's site, make a special point of reading the exceptionally fine commentary entitled:

Bernanke's Inflation Paradox

The Fed said it wanted higher prices. Voila!

http://online.wsj.com/article/SB10001424052748704677404576285021008297758.html?mod=WSJ_Opinion_LEADTop

Hat's off to the editors of the Journal for presenting such excellent articles on their site. Now if only we had political leaders who understood these things and who were true statesmen willing to heed the advice offered here. Perhaps our nation would have some hope that we can still rise out of the ash heap being created by our current crop of leaders who cannot stop spending this nation to its ruin and who indeed allow the Federal Reserve to deliberately debauch and thus ruin our national heritage, the Dollar.


 
 

2 comments:

  1. That was on Zero Hedge today:

    http://www.zerohedge.com/article/guest-post-gold-hedge-back-envelope-calculation

    How much gold would an individual investor need as a hedge against the total depreciation of fiat currencies? Here is a back-of-the-envelope calculation...There are about 5.3 billion ounces of gold "above ground," roughly 160,000 tons. At the current price of $1,500 an ounce, all the available gold is worth about $8 trillion. About half is in jewelry, 10% in industrial uses and 40% as central bank reserves and investment. If gold took the place of fiat currencies as "money," the available gold would have rise to about $140 trillion in value. In today's dollars, that's about 18 times its current price. So $1,500 X 18 = $27,000 an ounce...

    Now back to reality. The HUI is doing terrible. Why is that happening? One sure needs a steel stomach to go through that…

    ReplyDelete
  2. Thanks for those surprising articles published by the WSJ! Will add those to my reading list!

    ReplyDelete

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