Return of the Gold Standard…
Whats next for the Trump administration? Well here is the recent news from the CPAC engagement that may spark your noodle. Trump apparently has his eyes set on bringing the gold standard back to make “America Great Again”. It seems like a great idea; however, looking at the past year of events we can all say “WTF is he up to now.” According to Forbes Magazine, Trump discusses his feelings on the past and why it may be impossible,
“We used to have a very, very solid country because it was based on a gold standard,” he told WMUR television in New Hampshire in March last year. But he said it would be tough to bring it back because “we don’t have the gold. Other places have the gold.”
So now the question becomes, “How do we obtain the gold?” Well the Wall Street Journal on three possible ways to complete this task and they are as follows, “First, muddle along under the current “dollar standard,” a position supported by resigned foreigners and some nostalgic Americans—among them Bryan Riley and William Wilson at the Heritage Foundation, and James Pethokoukis at the American Enterprise Institute.
Second, turn the International Monetary Fund into a world central bank issuing paper (e.g., special drawing rights) reserves—as proposed in 1943 by Keynes, since the 1960s by Robert A. Mundell, and in 2009 by Zhou Xiaochuan, governor of the People’s Bank of China. Drawbacks: This kind of standard is highly political and the allocation of special drawing rights essentially arbitrary, since the IMF produces no goods.
Third, adopt a modernized international gold standard, as proposed in the 1960s by Rueff and in 1984 by his protégé Lewis E. Lehrman …and then-Rep. Jack Kemp.”
Whether this is possible or not, I’m convinced that the Trump administration will assess any option to continue the chaos that is being created in the United States of America.