40 years on, should the US go for gold again?
15 Aug, 2011 22:52
It has been 40 years since President Richard Nixon signaled an end to a US dollar backed by gold.
And while it was considered a bold step to boost the economy decades ago, today we see inflation, staggering war costs and a decrease in the dollar. The dollar has actually diminished in value by 98 percent since Nixon announced that the US would be defending the dollar against speculators. Is it time to go back to gold?“If our objective was to make the dollar stable for the world, we did not achieve that,” says Scott Carter, CEO of Goldline. “What we’re seeing is a move back to the gold standard,” he says, and though it isn’t official yet, all factors are pointing towards an eventual revert back to the ways of a pre-Nixon economy.Lew Rockwell, chairman of the Ludwig Von Mises Institute, shares those sentiments. Nixon, says Rockwell, “did a lot of evil things in his life . . . but this is probably the most long-lasting, terrible thing he’s done.”“I think returning to money policy that is based on economic growth and not on paying debt is absolutely sound,” adds Carter, who notes that the rest of the world is skeptical of the value of the US dollar as it continues to drop, all the while gold-prices are at an all time high. “The dollar has been plummeting in value,” says Rockwell, who predicts that it is only going to drop further in value. And, he says, “by holding interest rates near zero . . . you’re not only wrecking savers and investors but wrecking the future of the economy.”“I think the world is skeptical of that and that’s why you have this voice and this concern,” harps Carter.For one solution, Rockwell looks towards Republican presidential candidate Ron Paul. “We need a radical change and thank goodness, Ron Paul is talking about it,” he says. And as for Carter’s take on the matter, he suggests everyone add gold to their portfolio, “because of the conditions we are faced with today and going forward.” “The world, economically, is not in sovereign ground right now,” says Carter. “We see it in Europe, we see it in other countries.” With unrest on the horizon for America as the economy crumbles, he says people that want to keep an eye on their money need to have a long-term views, one that should take precious metals like gold into consideration.