October 01, 2012
To get rich is glorious.
As noted in last week’s column about the rising recognition by authorities in Germany about the virtues of gold, the gold standard is receiving impressive new recognition internationally.
The GOP plank calling for a commission to study “possible ways to set a fixed value for the dollar” - with an unmistakable nod to gold - is the most prominent element of the 2012 GOP platform still being heard to “reverberate around the world.”
Meanwhile, it continues to gain impressive momentum in the United States.
CNN’s Kevin Voigt writes, in The China Post, “Currencies: Re-evaluating the ghost of gold:”
This is by no means an isolated blip on the economic radar screen of China watchers.
As Christopher Potter, president of Northern Border Capital Management, so astutely observed in a column entitled China’s Preparing for the End Game - Are We Paying Attention, published in The Lehrman Institute’s TheGoldStandardNow.org - which Potter advises (and this columnist professionally edits):
This is not the first emergence of authoritative attention to the power of gold as the monetary unit by China in recent years.
Wikileaks provided a notable cable dated February 8, 2010 sent from the U.S. embassy in Beijing excerpting a story from Shanghai’s China Business News that observed:
This implies a preposterous devaluation, which is not the direction toward which the key gold standard proponents are progressing.
Gold’s proponents have no interest in scalding creditors… or debtors.
A better grasp of the implications of gold is demonstrated by Zhou Qiren, Dean of Peking University’s National School of Development and a member of the People’s Bank of China Monetary Policy Committee.
Zhou was interviewed by China 2011 Economy staff reporter Ye Weikian last year.
Dean Zhou presented, later in the interview, as pessimistic about the political possibilities of implementing the gold standard. He shouldn’t be.
Respected figures from the United States are now taking a more forward leaning stance in growing recognition of gold’s potential significance. Joint Economic Committee Vice Chairman Kevin Brady addressed the Prosperity Caucus on September 19th in Washington DC.
He alerted the Caucus to the significant and rapidly growing support for the Sound Dollar Act.
This columnist has termed that bill, sponsored in the Senate by Sen. Mike Lee, the most important monetary reform legislation in 40 years.
The Sound Dollar Act isn’t the gold standard. Yet it is widely seen as a major step toward creating a process to enable the reform of American monetary policy to a rule-based one. Furthermore, the Sound Dollar act is well designed to provide a context in which official reconsideration of which rule - the Taylor Rule or the classical gold standard - is, empirically considered, the better foundation for American monetary policy.
The day after Rep. Brady’s address Rep. Ron Paul held what likely will prove his final hearing as chairman of the House Domestic Monetary Policy subcommittee.
Its purpose was to review the economic distortions caused by artificial manipulation of interest rates by the FED. The hearing featured two of the leading proponents of what could be called the “American Principle” gold standard: journalist/belle-lettrist James Grant and financier/philanthropist Lewis Lehrman.
Both Grant and Lehrman outlined the severe problems that the FED’s central planning of our financial system are causing.
Rather than focusing on the fiendish problems caused by paper money, Lehrman extolled the dignity and moral heroism of Ron Paul for keeping the issue of monetary reform alive and concluded:
The most riveting political commercial of the 2010 election cycle was an independent expenditure by Citizens Against Government Waste entitled “Why do great nations fail?” - generally known as “the Chinese Professor.”
It portrays a Chinese Professor, in Beijing 2030, attacking Obama’s profligate spending policies and the debts America incurred. It concludes, to the laughter of the audience, “and now they work for us,” and received millions of YouTube views.
Chinese mercantilist policies are beginning to emerge as a subject of the 2012 presidential race. Rather than engaging in a blame - and maybe trade - war, however, a more optimistic possibility is emerging: the gold standard.
The road to the restoration of harmony, and mutual prosperity, is becoming the subject of renewed recognition both in China and America (as well, as noted last week, in Germany both by Deutsche Bank and the Bundesbank president Jens Weidmann).
The classical gold standard, conjoined with other free market policies, offers the very real, very attractive, possibility of renewed worldwide prosperity.
To quote one of the great supply-siders of modern history, Deng Xiaoping:
There is a dawning recognition, the hilariously reactionary Paul Krugman notwithstanding, that the road to prosperity is paved with gold.