The True Gold Standard (Second Edition)
Eswar Prasad, the Tolani senior professor of trade policy at Cornell University and senior fellow at the Brookings Institution recently sat down with me to discuss his views on the dollar and his new book, The Dollar Trap: How the U.S. Dollar Has Tightened Its Grip On Global Finance (Princeton University Press, 2014). A video and transcript of our conversation follows. Steve Forbes: Dr. Prasad, thank you very much for coming by today. You wrote a book that came out earlier this year called, The Dollar Trap, How the U.S. Dollar Tightened Its Grip on Global Finance when by its very behavior it …Read more
Jack Kemp was one of very few transformational political leaders of the 20th century. He incontrovertibly was the political prime mover in raising the world’s wealth to $100 trillion (trillion with a t). As this writer has observed: "According to the World Bank, the world’s GDP in 1980 was around $11 trillion. Today it is around $60 trillion. The added $50 trillion-per-year capitalizes to over $100 trillion in new wealth… even when adjusted for inflation." $100 trillion is a lot of money… even by Washington standards. Thanks to the work of Rep. Jack Kemp (R-N.Y.) and his tiny team, America …Read more
Seth Lipsky, the editor of the storied New York (a brand distinguished by the long residency of Henry Hazlitt), recently, in the , brought to wider attention certain remarkable recent comments by Paul Volcker. Volcker spoke before the May 21st annual meeting of the Bretton Woods Committee at the World Bank Headquarters in Washington, DC. Volcker’s remarks did not present a departure in substance from his long-standing pro-rule position. They nonetheless were striking, newly emphatic both by tone and context. Volcker, asked by the conference organizer for his preferred topic, declared that …Read more
We commence by stating that gold, silver and any metal deemed valuable in the eyes of the beholder has been used for thousands of years as a medium of exchange between people and countries seeking to accumulate capital and scarce resources.
The problem with this was that as nations grew larger and trade opportunities increased, a suitable system had to be placed in operation to handle the increasing complexities of an evolving financial world. We must examine the reasons for the rise and fall of the gold standard which truly was the solution to the increasing complexities of finances, trade and …
This is a shocking story with a long, slow-burning fuse. It begins in July 1914 when Germany abandoned the gold standard, for the simple reason that on the eve of war its population no longer trusted paper money. The moment the gold standard was abandoned, however, paper money was the only money to be had. Military defeat in 1918 was followed by social revolution and recrimination about the peace terms, and by the end of 1922 the world's second largest economy had entered a period of hyperinflation, defined as prices rising by 50 per cent month-on-month, which lasted until the end of 1924. Frederick …Read more
In , British Member of Parliament Kwasi Kwarteng traces the history of debt from 16th century Spain all the way to our post-2008 economy and concludes that tying currency to gold is the best policy. That the gold standard is essential to a strong and prosperous economy. He does, however, recognize that rapid deflation would occur if we went back to gold. “I’m not going to say that we’re going to bring the gold standard back immediately or that we should. What I am saying is that if you look at history you find that the gold standard is a much more stable arrangement than what subsequently …Read more