In Forbes Magazine's op-ed column, he elaborates:
Monetary policy is one of those rare subjects that truly intimidate most people, which is why the Federal Reserve has less formal oversight--even though it can destroy our economy--than do our intelligence agencies. Politicos are loath to go beyond bromides when it comes to treating the dollar with respect. Among the current crop of contenders only Representative Ron Paul (R–Tex.) unhesitatingly brings up the dire necessity of relinking the dollar to gold.
The economic profession and most bankers still labor under the Keynesian superstition that gold somehow caused the Great Depression and is a straitjacket that will inflict unemployment and misery. The opposite is true. After the catastrophic inflation of the Revolutionary War our first Treasury chief, Alexander Hamilton, made it a point to fix the dollar to the yellow metal (as well as to silver). He figured that a sound dollar would encourage productive investment and attract capital from overseas. He was right. The U.S. boomed.
It wasn't until the early 1970s that the connections between the dollar and gold were completely severed. The ensuing decade was an economic horror. During the 1980s and most of the 1990s the dollar price of the yellow metal moved in a fairly narrow range. But for the last decade the gold gyroscope has been spinning like crazy. We're in a 1970s-like malaise. The weak dollar is fueling speculation in commodities, currencies and farmland and is chasing off capital to Asia. Cheap money also undermines the value of capital, which is why we have subpar levels of business investment.
Timid presidential candidates should fortify themselves with the knowledge that the disastrous housing bubble could never have occurred had the Fed not printed so much money. They should also dust off John Kennedy's famous quote that the dollar should be as good as gold.
The debate should be focused on what the best gold system is, not on whether we need to go back on one. A good sound bite for candidates: Which would you trust to protect the integrity of your money--a gold standard or Washington politicians?
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