What the Gold Standard Isn’t

June 15, 2011

courtesy The Lehrman Institute

The gold exchange standard nor the gold price rule are a true, classical gold standard.

Nobel Prize winning economist F.A. Hayek once quipped, “Government is the only agency which can take a useful commodity like paper, slap some ink on it and make it totally worthless.”

The government has managed chronically to erode the value of the dollar to the point where it is widely, and realistically, expected to keep losing its value against real goods and services as well as against the currencies of other countries. This monetary degradation is bad for the economy.

TheGoldStandardNow.org believes that people deserve better than this in their money. Indeed, we believe that working people deserve the best and that this, in turn, means, in the words of French President Charles DeGaulle: “…there can be no other criterion, no other standard than gold. Yes, gold, which never changes, … which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence.”

Other expedients, sometimes superficially resembling the gold standard like the “gold exchange standard” — a “grotesque caricature” of the gold standard which helped to cause the Great Depression — or a “gold price rule”, or a commodity basket or any other commodity — have severe inherent defects. They do not have the equal monetary properties exhibited by gold. Gold is very malleable, storeable at high value in small space, divisible like paper, indestructible and immutable. Thus was gold over 3,000 years naturally selected in open markets as money acceptable to all market participants across all barriers of language, borders and frontiers. It was the common currency of the world underwriting all national currencies. Only the classical gold standard has an established, proven, track record, when properly implemented, of creating an environment of long term prosperity — a golden age.

A new golden age, based on the gold standard, is possible with your support.

© 2011 The Lehrman Institute