The case for a return to the gold standard

While the issue of causation versus correlation can be argued all day, Louis Woodhill at Forbes makes a compelling case for moving the dollar out of the “fiat currency” category and once again pegging it to a known standard. Like gold.

I suppose when the dollar was moved off the gold standard, it was viewed as a radical and wild-eyed idea (or maybe not, since it was politically inspired and handed politicos the keys to the printing presses), just as a return to a standard is now viewed as archaic, an anachronism, and basically, freaky-deeky. The floating dollar was sold as temporary issue (part of the Nixon shock) and—whatyaknow—it became permanent.

But the real issue is one of control. When the dollar is tied to a standard, crony capitalism, rent-seeking, and regulatory capture are more difficult for the government to practice. The best impact of returning the dollar to a standard is that this “malinvestment” (think dot com and housing bubbles and the looming entitlements hard-landing/implosion, AKA inflation) would seem to be less likely to occur, largely because investment risk would decrease.

The loss of flexibility (that is, a diminished ability for our enlightened elites to influence the economy—to pick winners and losers) would be the downside…but only for the aforementioned enlightened elites.


About Professor Mockumental

I enjoy almost all forms of parody, buffoonery, and general high-jinks. Satire has shown itself to be an essential societal need; I therefore humbly offer my services in such a manner. I enjoy mocking the usual suspects at the New York Times (Charles Blows, Moron Dowd, and the earth is flat guy) and Washington Post (Dana Milkbag, E.D. Dijon, and David Ignoramus). There are many others as well, but sadly, there are always too many targets and too little time.

Posted on August 30, 2012, in Uncategorized and tagged , , , , . Bookmark the permalink. Leave a comment.

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