The True Gold Standard (Second Edition)
Q&A with Steve Forbes about his upcoming book, MONEY: How The Destruction Of The Dollar Threatens The Global Economy And What We Can Do About It.
... What don’t people get about money? Money is not wealth. Printing more of it doesn’t make society richer. You might get some short-term activity. But you end up with wealth destruction, not creation. For centuries our leaders have mistaken money for wealth. But it is an instrument of measurement like a scale, a ruler or a clock. Instead of measuring time or weight, it measures value. How has this misunderstanding hurt people and the …Read more
The U.S. dollar was first regulated by the Coinage Act of 1792 and prescribed as 371.25 grains of pure silver. The eagle, worth $10, was 247.5 grains of gold. One cent, worth a hundredth of a dollar, was 24 grains of copper. The value of the metal contained in the currency kept prices relatively constant before the founding of the Federal Reserve. During those 120 years, prices rose only 3%. In contrast, during the 100 years since the Federal Reserve, prices have risen 2,280%. The Constitution gives Congress the power to “to coin money” and “regulate the value thereof.” This dictum was …Read more
“Got a buck? you’re in luck!” This jingle was a staple for you ever since your parents started giving you an allowance. At the time, you got maybe $5 a week to spend or save as you pleased. Although this was a fortune as far as you were concerned, a fiver tends to evaporate quickly, and your snack options were limited. One of the few exceptions to this was McDonalds. For just a dollar and change you could get a double cheeseburger or even hot fudge sundaes. Fast forward 5 years. You’re paying a lot for college, so the Dollar Menu is still a frequent order for you. It’s changed now: the …Read more
Outside China, Mao Zedong is out of fashion these days, remembered less as a revolutionary hero than as a tyrant. But the currency which sports his image on its banknotes is making headway abroad. In Hong Kong some cash machines dispense the “redback”, as the yuan or renminbi is known. In Mongolia 60% of cash in circulation is estimated to be Chinese. The yuan, whose internationalisation really began only in 2009, is now reckoned the seventh-most-used currency in the world, up from 13th a year ago. When China, the world’s biggest trading nation, becomes in the next few years its biggest …Read more
“Worse yet, the number of bankrupt families was climbing. In the early 1980s, when my partners and I first started collecting data, the number of families annually filing for bankruptcy topped a quarter of a million. True, a recession had hobbled the nation’s economy and squeezed a lot of families, but as the 1980s wore on and the economy recovered, the number of bankruptcies unexpectedly doubled. Suddenly, there was a lot of talk about how Americans had lost their sense of right and wrong, how people were buying piles of stuff they didn’t actually need and then running away when the bills …Read more
A significant reason for the Gold Standard to be successful is that it provides absolutely no chance of a hyperinflation. The reason is that gold is tied to the currency and as such until the whole stock of gold was increased additional money could not be printed. In the hindsight that is the very reason why the US economy could not come out of the great depression of 1929 rather quickly. Since the money was tied with the gold, the US government had to look for other opportunities and tried to attract the foreign investors who would bring in their investment in the form of gold. Interest rates …Read more