The call by Newt Gingrich for the creation of a commission on gold to examine how America can return to a system of hard money is a step forward for him and the Republican Party as we go into the most formative months of the campaign. The former speaker issued his call at Columbia, South Carolina, at a policy forum on American global leadership. He used the phrase “hard money” to speak of a gold standard of the kind the Founders of America had in mind. It would mean, he said, “you can’t just hide from your problems. You’ve got to solve them.”
Mr. Gingrich’s call is the most clarion yet among a Republican field that has been dancing around this issue since the start of the campaign. We’re delighted — thrilled — to see it, because we have been stressing the centrality of the monetary issue since before this campaign began. Let us say, though, that our country is way past the point where we need another commission. A commission, as President Reagan learned in 1981, is a recipe for burying an idea, not putting it into law. It will be important for Mr. Gingrich to get past the commission idea in a hurry.
The fact is that we know how to get back to a gold standard. This has just been outlined by Lewis Lehrman in a new book, issued in October, on exactly this point. It is called “The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies — How We Get From Here To There.” Mr. Lehrman, a businessman turned scholar, is not just any gadfly. He was a member of the United States Gold Commission set up under President Reagan in 1981. The commission, in a historic blunder, recommended sticking with the old system of fiat paper money.
It’s most noteworthy achievement, still widely discussed today, was the minority report, which was written by two of the commission members — Mr. Lehrman and a relatively new member of Congress named Ron Paul. Their minority report, later issued as a book called “The Case for Gold,” recommended a return to hard money. But it was swept aside in the tumult of the early Reagan years. That was a time when the supply-side measures of Mr. Reagan were combining with the tight-money policies of a Federal Reserve headed by Paul Volcker to bring us back from the precipice. We had been teetering on the brink because of the inflation unleashed by Lyndon Johnson’s campaign of guns and butter and President Nixon’s abandonment of Bretton Woods.
So we don’t need another confounded commission. We need a political campaign that knows where it’s going. It sounds to us like Mr. Gingrich understands these principles; he’s well acquainted with Mr. Lehrman’s work, as he made clear in an interview with Lawrence Kudlow in December, where he also praised Steve Forbes, another honest money advocate. Congressman Paul knows the issue cold. Governor Perry has also indicated that he comprehends the issue. Our own estimate is that Governor Romney, who blundered at the beginning by telling Mr. Kudlow that he would not challenge Chairman Bernanke’s quantitative easing, is educable; he’s already indicated he wouldn’t reappoint the chairman. We’d prefer the Republican Party Platform Committee to another government commission.
The thing that needs to be done is go get the best of the Republican candidates and the platform writers together with Mr. Lehrman and his brain trust, which includes a number of figures who understand this issue down to the ground. Among them are James Grant of the Interest Rate Observer and policy experts already grouped under the umbrella of The Gold Standard Now. The ideal outcome, in the view of this newspaper, would be a platform plank that could be carried into the general election by whoever wins the Republican nomination. If that candidate wins the election, the platform plank becomes a genuine mandate for restoring America to the era of sound money under the president and Congress that will be in office for the 100tth anniversary of the founding of the Fed.
Looks like your phantom post has at last materialized.
About financial donors I know only what I hear, Bland, but I ALSO know that the energy to run a campaign — to walk precincts, to answer phones, to lick stamps, to hand out literature, to get out the vote: the “shit work” (without which there is no campaign) — is coming from a place that sounds a pronounced note of Judeopathy. It’s unmistakable if you listen to talk radio with any consistency.
For whatever reason, the people of whom I speak have been permitted to believe that they have a champion in this guy.
Maybe they don’t — but, then again, maybe they KNOW something that we DON’T . . . .
As for Dr Paul being an “obsession” with me, I’ve scarcely mentioned him until quite recently — and then, largely (in fact, almost entirely) in direct response to your unmistakable anxiety in relation to him.
I’ve been aware of Congressman Paul since the early 80’s — and as long as he was talking about sound money, the Right to Life, 2nd Amendment, etc, I’d always found his remarks quite salutary.
In those days, when he took his isolationist positions about foreign policy and made his dubious alliances with the left (sorry, that’s the only sensible word for it) in characterising Israel as a ‘colonialist power,’ I regarded him — and what I perceived as his compulsive astigmatism — with gentle bemusement.
He’s playing in a bigger league now, however, and his friends (some of them) are dangerous — whether he himself is or not. They are well organized, and I will not trust him at least until I hear him cut them loose.
And I have little doubt that a lot of other folks will also find themselves breathing easier if & when he does that.
Why is it so much to ask?
Wow! Paul said that – all by himself?!?!?!?! Wow! Anyone who says that should be the prez or sometin! Wow!
I said before that many of Paul’s general directions are OK. It’s when he gets down to the details that his epidermis shows.
Because he’s not fit to command a country.
I already provided you with 2 links, both showing what an oaf Paul is, even when coming across and articulate, once you actually investigate the facts. I sited nothing about his personal habits. I also have hardly written about Paul here or anywhere else. That’s because most commenters I come across don’t even contemplate sticking their heads in the sand and ignore Paul’s overall ignorance of matters pertinent to someone who wishes to take charge of a modern country of 300+ million citizens.
Stop pretending that Paul doesn’t spew nonsense when it comes down to accurate assessments of many a situation. He does it all the time. As for general advice, such as not spending what you don’t have, I get that from my father. But I wouldn’t vote for him for the presidency. Ron Paul is no better.
While we’re on the topic, first of all, are you even a US citizen? And secondly, if you are a citizen, which candidate would you consider voting for?
HERE is Ron’s latest, Shy Guy, cut and pasted from the first video site I found for the past 24 hours. What part of “We need to live within our means”, which sums up ALL of Paul’s foreign and domestic policy, do you find fault with? Are you and I talking about the same candidate? Come on! Tell me the real reason for all this attention you and others are showering on him! I think Paul comes across as an articulate, intelligent man. You might find a clip of him picking his nose or flailing his arms, but that just tells me you’re prejudiced against him; it doesn’t tell me why.
While we’re on the topic, first of all, are you even a US citizen? And secondly, if you are a citizen, which candidate would you consider voting for?
It is apparently a very quiet, very calm species of ‘raving’
— and my only ‘fetish’ about the Congressman is the ‘silly’ one that believes there is a value to be found in clearing the air,
so that he wouldn’t be risking being misunderstood.
Seeems to me there is something quintessentially RATIONAL about such a proposal
— and what strikes me as truly bizarre, Bland, is your obvious, and most uncharacteristic, defensiveness in the matter.
I did a lot of work on draft resistance during the Vietnam affair.
For the record, an MD whose medical studies were completed had a much harder time of subsequently getting deferments than almost anybody else.
My analogy to AF1 was figurative.
History shows that serving in ones military and being a capable politician is not a guaranteed recipe for success. The opposite assumption you allude to, that NOT serving makes one a bad or worse politician is also not a sure-fire formula.
Being a physician and a congressman have nothing directly to do with one another. If Paul’s medical analyses are as far flung as his paper thin understandings of world politics and foreign relations, then no one should go to him for even a headache. And there are no lack of absolute boobs and dodos elected by the American people to represent them. While they might numerically be most often affiliated with the Democratic party, there are lots of the same to admire on the Republican and conservative side. Telling me he’s a doctor and a congressmen means absolute crap as far as his qualifications to run the United States.
One doesn’t need Dondero to understand what’s wrong with Paul. Just pay attention to what Paul bumbles, now as in the past.
For some reason, my reply to dweller was eaten up by the system. The censor seems to be at work again. I won’t even bother to re-compose it. Dweller is simply raving. He has some sort of fetish about Ron Paul, and he is welcome to it. I won’t be bothered with such silliness.
Dweller says,
First of all, SHOW me his “Jew-hating” constituencey in the form of a list of his major donors. Gingrich is backed primarily by a Las Vegas casino-owning billionaire. Obama, Romney and Santorum are backed by obviously self-interested Banking and media interests. Ron Paul is backed by the US men in uniform, plus small contributions from Mason Capital Mgmt. and Microsoft, and by small donors. I have never seen the list of his small donors, nor those of the other candidates. If you find ANY Nazis or antisemites on any of these lists, please let me know — otherwise, just cool it, brother! This congressman from Texas has become an obsession with you and some others here, bordering on a fetish!
Shy Guy,
you bring up a few relevant points. First of all, I think the only US President who could pilot Air Force I was George W. Bush; and he wasn’t very good news for Israel. To his credit, at least Ron Paul served in the Air Force, during the Vietnam War — which is more than one can say for ANY of the other candidates, and might go a long way to explaining why he has such support among veterans.
As for calling Paul a nutcase and complete ignoramus, that says something about your judgment: Paul is a qualified physician and congressman. Perhaps Congress welcomes ignoramuses and nutcases, which would disqualify Newt Gingrich; but physicians are under continual scrutiny by state medical boards. If Paul had a mental condition, it would have been discovered by now.
Another important point inferred by what you say, is that you dislike Paul a priori, as I am sure others on this blog also do. I have never heard a serious charge against the man, other than the accusations of a man of questionable credibiltiy, Eric Dondero, who divorced himself from Ron, I believe, even before Gingrich deserted his first wife. I don’t consider this dredging up of long hashed-over criticisms during this campaign to be any more relevant and genuine in Paul’s case than in Gingrich’s, and you will note that I endorse both candidates.
The only SERIOUS charge I have heard anyone here level against Ron Paul, is that he looks like Stan Laurel:
(shown here with Newt Gingrich)
I’ve heard that.
But even if it were true, it would have no bearing on my comment.
Don’t put words in my mouth, Bland.
Syllogistic argument is the stuff of demagoguery; you can do better
— I’ve seen you do better.
I said the man has a substantial Jew-hating constituency. Whether they happen to be military, or whether they even constitute the majority of his support, is immaterial. The Judeopathic component IS, in any event, a substantial following — and I stand by the remark.
I don’t know the antecedent represented by what you call “this” opposition, Bland.
I DO know that my OWN opposition to him has EVERYTHING to do with antisemitism
— and that he could go a long way toward dispelling my opposition by way of the flatly-stated disavowal that I proposed above
a very simple matter really, and it would certainly help clear the air — here & elsewhere — I’ve no doubt.
The question is
— whether he’s got it in him to DO it.
Paul is a nutcase and a complete ignoramus.
Some of his ideas fly in the right direction but that doesn’t mean he can pilot Air Force One.
Ron Paul’s three top donors are members of the US Army, the US Navy and the US Air Force. If you are judging the man by his supporters, I presume you have no use for our military. This opposition to Ron Paul has nothing to do with antisemitism, and you know it.
Goldi, was that you at our recent candlelight supper reception?
Maybe so, but hard money — precious metals — provides a built-in, structured discipline that fluctuating faith in the transitory reliability of govts cannot.
He has a substantial Jew-hating constituency, and everybody knows it, Bland.
If he is serious about not being sympatico with them, then let him — once & for all — come out and say to them:
“I… don’t… want… your… help…, moral… OR… financial.
Don’t want it AND won’t accept it.
Take your support and shove it.
Get off my bus
Off my stage
Out of my hair
Out of my life.”
Until that happens, Bland, it won’t be possible to take him seriously.
(Maybe not even then, to be candid — but certainly not UNTIL then.)
You can live in the past all you want, and if you want you can try to use lollipops instead of money.
It won’t change a thing, and it will never ever ever bring back the use of gold to back currency.
The gold standard is just a waste of time.
You know it, I know, and everybody knows it, except for loons like Ron Paul and impulsive wack jobs like Newt Gingrich.
Since I have decided to recognize your considerable knowledge on economics and go into paper money, I would like to know which paper currency has gained with reference to gold. One with which using the same amount of paper money I could buy more gold today than what I could have bought ten years ago.
That’s the ticket to my retirement… into an asylum that is…
By the way, wanna buy some flying unicorns?… 🙂
If all of you guys don’t see that the world is happier, more stable, less oppressive, healthier, better fed, and better managed place than it was 60 years ago, all I can do is congratulate you on your denial. Yes, there are places where suffering, malnutrition, and disease are problems. But in the US, Europe, most of South America, and Asia conditions of life, even with the economic crisis we are dealing with now are several maginitudes better than they ever have been.
But most importantly and while this may be hard for you gold standard guys to accept, there is no chance whatsoever, that is 00.00, that any country can or will return to the gold standard.
The whole idea of a gold standard is so ridiculous, so incredible, and so impossible that it is just plain silly to even discuss it in any serious terms whatsoever.
Better to discuss flying unicorns, there is at least some chance that we can find some of those!
Laura,
I have only your word that Ron Paul is a crackpot. Everything I’ve seen and read of him, makes sense. Paul says it is ridiculous for our President to behave as though he were the world’s emperor, when in fact we are broke, deeply in debt and getting deeper in the hole every day. Tell me, how is that a crackpot idea?
There comes a time when the party is over, when we need to throw up, call a cab, find the door and make our way home. Britain gave it up in 1956, Germany and Japan in 1945, Russia in 1989. We’ve been left holding a bag that nobody else wants to lift with one finger; and it’s time to share the burden with others. To you, that’s a crackpot idea; to others, it isn’t. That’s why I proposed Gingrich as an alternative.
Gingrich would be fine. But why do you insist on promoting Paul? He is bad news. I don’t want him anywhere near the White House with his crackpot foreign policy views.
Ken wrote:
Except that it wasn’t. The “growth” that was created wasn’t real, and isn’t real. We’re all about to get a taste of what happens when reality hits the fan. It is going to make the lustre of the economy up to now seem idiotic, which it is.
I loved your reply to Ken and Bernard, Shmuel. That pair are living in a dream. I imagine they are Hindus, believing all is illusion. As for me, I can relate to gold as having symbol Au, and an electrode potential of +1.69V. That high electrode potential makes it unique among the elements, along with its excellent electrical conductance and extreme tensile strength and malleability. It also has unique cluster and d8 square planar chemistry. It is, of course, very rare. It has unique solubilities and reactivity. Selenium can substitute for sulfur, and nitrogen gas can substitute for argon; but nothing can substitute for gold. From ancient days, our wisest men tried to mimic the properties of gold, but failed — until 1973, when President Nixon, by imperial decree, declared paper to be equivalent to gold. It was a work of sheer magic, of unsurpassed wisdom! I am amazed that Nixon did not receive a Nobel Prize in Chemistry for his accomplishment!
I, however, am a lowly human, living on planet earth. I cannot attain to the wisdom of Nixon, of Bernard, nor of Ken — who insists that we are so much better off as a country since 1973. My objections are all illusion: The exponentially widening gap between rich and poor, an economy seemingly in collapse, favellos of homeless in the streets and parks of my city: all is illusion, say Ken and Bernard. Paper, say they is the new miracle substance! With one piece, I wrap the fish; and with another, I make $100,000 bills! Oh, how high they have attained; and how ignorant am I! But I must live with who I am.
Shalom shalom 🙂
I agree again with Ken regarding expansion of economy from going off gold standard. This is because money is a symbol of faith and trust which generates credit which drives development and the economies. Dont confuse mismanagement of the money economy with the system being no good. One has to learn to manage a good system as opposed to throwing out the baby with the bath water. RE Shmuel’s last comment: it was BO who commended the fixed price of gold and suggested returning to it; also lets not confuse the real value of metals based on the demand for their use as opposed to the the extra value that would be placed on it as a result of their use as money. Going off the gold standard is looking for a simplistic solution to avoid dealing with the real problems which in fact would still be there to haunt us in other forms.
This would be for several of my esteemed co bloggers.
I read in utter disbelief at the complete void between reality and some views.
Paper money is a Chinese artifact, I forgot the Dinasty, dating back to the 600’s later expanded to Europe and only in the 1800’s I believe into the Colonies now States.
For the paperists, I would like to remind them that without gold, the rest of the “backing” dances are just that. With what, pray tell us, would the US back the dollar. Printing presses?
Bridges which a falling down? Detroit’s auto golesm? Crops? land?
The fact is that the price of gold is U$S 1700 to the ounce and not 1700 ounces to a dolah.
Since the late 80’s is seems to me that the paper money kind of lost a bit of value compared to gold.
As to what is what. That OLD stuff, the primitive gold saga.
The whole scientific world would at a standstill without gold and other precious metals. Much as one may try using paper or plastic as wires, they will just remain that.
For a start there would not be microchips, transistors and some of the most advanced diodes as all inner conductors are pure gold wires. ALL electronic assemblies interface contacts are gold plated and many components pins or leads are also. Silver is replacing lead as assembly aid. W/O gold, space operations would be virtually finished. No portable phones or computers either. Most aircrfat avionics, military and land vehicles would roll back to the 20’s.
And I would like to see anyone pairing the buck to 35 dollars an ounce gold.
The people would be wise to consider those that propose going back to a gold standard and cut bait from the FRB printing presses.
‘m jus sayin’
I would go a step further and offer that going off the gold standard was the impetus for the almost unbelieveable expansion of America’s and the world’s economy. Most people certainly in the developed West, but even Asia, South America, and Eastern Europe live in luxury compared to what they had when economic development was constrained by the need to back up a currencies value with gold.
No serious person really suggests going back to that failed method of valuation of currency. The ones who propose it are saying it for shock effect because even they know it will never happen.
Ken, I have to agree with you. Barter and gold exist now, those who use money can do both. gold is indicative of nothing and is irrelevant except as a symbol of value just as money is a symbol of value. The key is in the suggested price fixing at 35 per ounce. this is just a way of fixing one price rather than multiple prices. The setting of the gold price is the real “solution” because the same thing can be accomplished by fixing commodoty sale prices. the problem is not in the use of money as a symbol rather than the use of gold it is in the corruption of the population and the leadership, the lack of policing and the notion that an unrestrained capitalism will solve all problems with supply and demand. It is interesting that the same people who want unrestrained capitalism also ant a gold standard. Its like saying lets put our faith in God instead of learning how to improve our economic and social system. But Gold is not God and God helps those who help themselves
Why not go back to the 1900’s while we’re at it? The gold standard is irrelevant in today’s world, just like wooden warships and horse drawn buggies.
There is absolutely 00.00 chance that America will or even can return to the gold standard.
Real world problems require real world solutions, not fantasies or some mythic return to an earlier time.
This is the problem with the Ron Paul’s of this world, they live in some sort of Never Never Land where there are flying unicorns, candy cane trees, and marshmellow mountains.
And a return to the gold standard.
Ken, you must be very young. I was around when we were on the gold standard. Our house payments then were only $70/month; and yes, we did own our own family car. We even had a refrigerator, electric wash machine and television!
We can all go back to living in caves too, and slaughtering our own meat, as well as growing our own vegetables.
All of which makes about as much sense as returning to the gold standard. The problem is the abuse of credit, not credit itself. The central banks of every country have been too lax in limiting the amount of borrowing being done by governments and the huge debts they have are destroying their economies. On the other hand, nations like Israel, which indeed have debts, manage to keep those debts within clearly defined and repayable limits.
A return to the gold standard would be the equivalent of getting rid of cars and trucks and going back to horses and horse drawn carriages.
And one more thing, a return to the gold standard will never, ever, ever happen.
Gingrich is the best candidate and I would support him. But…
Great idea with only a small problem, basically related by the US people’s way of life.
How will the US “PRINT” more gold when the orignal stack of bars is gone, in about two months after the gold thing takes off? Will the US siphon others gold and again exchange gold for IOU’s?
The next president if Mr. Soetoro is not it, will have to do miracles to correct the whole system and re orient the people as well.
Hi, Goldi. You said,
You asked two questions. First of all, how the gold standard would affect the overall economy. The gold standard requires that our currency be backed up by gold metal — that is, if you so desired, you could turn in your US currency and receive gold in exchange. You might think that would lead to speculation, since the price of gold often goes wildly up and down. The reason it fluctuates so much, however, has nothing to do with the actual value of gold. One reason the price of gold fluctuates, is due to the fact that it isn’t the value of gold fluctuating at all, but the value of the currency (say, dollars) being exchanged for it that actually fluctuates. Gold itself has an intrinsic value, as do other metals such as copper, steel and platinum, which varies a little bit depending on supply and demand; but this variability accounts for only a small fraction of the price variability. When gold was the standard for US currency, the price of it was pegged by the US government at $35/ounce, and the public was restricted in how much it could own.
The second reason the price of gold fluctuates so much, is that people speculate in gold, especially in countries that have currency of questionable value. When the world economy gets shaken up, as it did in 2008, people usually rush to buy gold, and are willing to pay exorbitant prices for it. When their confidence in the world economy returns, they generally sell their gold at a reduced price. Speculators know about this fear/confidence cycle, and buy low and sell high. That exaggerates the fluctuation in the price.
When the US went off the gold standard, in the early 1970s (under President Nixon), gold was replaced by “fiat currency”, a fancy name for “funny money”. This fiat currency was backed not by gold, but by thin air. In otherwise, the US Government gave itself the right to print as much money as it wanted, whenever it wanted to. You might buy a car, for instance, for $10,000. If the government flooded the market with newly printed money, it would be able to “give” you, for a small fee, say, $90,000 additional money for buying a car. Since the govenment printed the money but did not make any additional cars, you and others would be trying to purchase the same cars you were trying to purchase before the money got printed. You would therefore pay $100,000 for the very same car that cost only $10,000 before the money was printed.
That, of course, is called inflation; and by the way, it isn’t actually the government that prints the money or decides how much to print. That task has been turned over to the country’s biggest bankers, in a cartel called the Federal Reserve. They print the money, and lend it to themselves at a low interest rate. These very same banks then turn around and lend the money to you at a higher interest rate. Doesn’t that make you want to be a banker? It’s a fabulous business!
I guess I’ve answered both your questions. The world economy is affected, because fiat money makes kings out of the world bankers, who proceed to rule the world for their own benefit. The losers are the taxpayers, you and I, who have to work and pay taxes so the government can give money to the bankers. We essentially become their slaves. The gold standard corrects this problem. As for the price of gold, it needs to be fixed at a set value. It used to be fixed by international agreement; but it doesn’t have to be, because the US dollar is the world’s reserve currency — whenever people buy or sell US dollars, they would essentially be buying or selling gold, American gold valued at the set rate.
I hope this has been helpful. I am not an economist, but I have experience at balancing my own bank statements. The bank does not allow me to write checks for any amount I wish: only the banks themselves have that privilege, and they have been given that privilege by an act of Congress. They are a different species, not as you and I.
Hello Oatmeal,
I have a few things to add to this theme.
1)To start off let me say that I believe that the Federal Reserve & all of the Central Banksters globally
Are a pack of evil swindlers & thieves.These people own the wealth of the world,in effect they own the world!The political echelons & the Wall Street types are their political frontmen.The bankers operate in the shadows & go to great lengths to keep the public dumbed down & almost completely ignorant of their operations.The Fed is not part of the government,it is a private cosortium of bankers working for themselves,not for the tax paying public.These people,in their greed,are responsible for more misery & suffering in the world than any other group.Why am I going after the Fed,what has this to do with the gold standard?Everything!Gold/Silver,hard money,are the enemies of fiat debt based currency printed by Central banksters.Fiat currency is backed by nothing tangible,it is pieces of paper created out of thin air!If the nation went back to money redeemable in gold & silver it would mark the beginning of the end for the central banks.Whole books are available on the subject,read them.
2)In june of 1963 President Kennedy signed executive order 11110 which directed the Treasury Dep’t to print U.S. silver certificates to replace Federal Reserve bills.Over 5 billion dollars were printed in $2 & $5 denominations.This was a direct threat to the Federal Reserve Bank.Six months later JFK was murdered in Dallas.Executive Order 11110 has never been repealed & is still on the books!
2)In my opinion Ron Paul is a mixed deal.On the one hand I like
Could someone explain to me, how the gold standard will effect the overall economy, and the price of gold?
I thought I would never see this, but it makes sense: Gingrich and Paul are the only two serious candidates who are not funded by Goldman Sachs (GS). Since Gingrich has also held the most solidly pro-Israel stance of all the candidates, maybe this will shake up some Israel backers — especially Evangelical Christians — that supporting Ron Paul does not amount to a great “Jew hunt”. I won’t be so bold as to suggest they support Paul; but I would STRONGLY suggest that they support either Paul or Gingrich, and dump the Goldman Sachbots Obama, Romney and Santorum (as well as Rick Perry, who hasn’t a ghost of a chance no matter who backs him).
The ideal situation, would seem to be for Gingrich and Paul to support each other, and perhaps run on a single ticket. In this respect, Ron has much more to lose than Newt: He has far fewer negative votes, and a better polling margin against Obama than the latter; and Ron has a solid base of educated young people, many of whom would lose their lunch at the thought of the archetypical Washington insider Gingrich. In this last respect, it probably wouldn’t be profitable for the two camps to link up; but none other than Ron Paul has suggested as much as a way to defeat GS lackey Romney.
I will certainly begin praying for both candidates. My optimism has just gotten a dose of Geritol.