While the Obama administration feeds us junk statistics about the “recovering” economy, the Bureau of Labor Statistics reports that the seasonally adjusted price index for meat, poultry, fish and eggs hit an all-time high in May.
Are you fed up?
While the Obama administration supports the Federal Reserve funneling loans and credit to big government, big banks and big corporations – but reducing loans and credit for job-creating small businesses – a 2013 Rasmussen poll reports that “74% of American Adults favor auditing the Federal Reserve and making the results available to the public.”
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Are you fed up?
Money walks while Obama talks. While the president brags about his fifth “recovery summer,” even his Federal Reserve Chairwoman Janet Yellen, recently admitted, “The recovery still feels like a recession to many Americans.”
As Steve Forbes points out in his new book, “Money,” “What a dollar could buy in 1971 costs $5.78 in 2014. In other words, you need almost six times more money today than you did 40 years ago to buy the equivalent goods and services.”
He and his co-author, Elizabeth Ames, add, “It’s no coincidence that the federal debt has doubled since 2008, the same year that the Fed started implementing QE: quantitative easing – the biggest monetary stimulus ever [that] has produced the weakest recovery from a major downturn in American history.”
The Keynesian and monetarist bureaucrats in the Obama administration and the Federal Reserve “are convinced that government can successfully direct the economy by raising and lowering the value of money,” write Forbes and Ames. “[But] when the value of money fluctuates, as it so often does today it produces uncertainty in addition to unnatural and often destructive marketplace behavior – artificial booms and busts that breed malignant economic and social consequences.”
Are you fed up, as Forbes.com contributor Richard Finger is, when he writes that the Fed’s low-interest-rate, easy money policies “punish the virtuous, the millions of responsible savers … They can no longer count on decent risk-free returns for retirement”?
In the face of all this Keynesian and monetarist failure, Forbes and Ames propose “a return to gold-based money,” which, they admit, “the policy establishment still dismisses … as radical.
“Pegging the dollar to gold, they write, “takes decisions about the value and supply of money out of the hands of bureaucrats whose judgment is too often in error or driven by politics.
Bureaucrats can no more guess the need for money than central planners could run an economy in the days of the Soviet Union. Seemingly sophisticated equations and various measures of money can never anticipate what people actually do.”
Forbes and Ames write that after the 1944 Bretton Woods conference of Allied Nations tied the currencies of nations worldwide to the U.S. dollar and tied the U.S. dollar to gold, from 1946 to 1970 “U.S. industrial output surged 209%, an average of 4.8% a year.”
But Richard Nixon took the U.S. dollar off the Bretton Woods gold standard in 1971. In the decades that followed, the strongest economic growth was during the Reagan and Clinton years, when both presidents talked up the dollar and gold’s price was steady at about $350 an ounce. However, as The New York Times reported earlier this year, “the economy has expanded at an annual rate of 1.8 percent under President Obama, half the pace of growth in the first five years of the Clinton administration, and below the 2.5 percent annual growth rate for President Bush between December 2000 and December 2005 in the same years.”
According to Forbes and Ames, pegging the dollar to a set price of gold would “drastically reduce speculative trading … lower food and energy prices [because] price signals would be free of distortion” and would direct capital and brainpower to innovation, business investment and job creation, as we saw during the Reagan and Clinton years.
“Just as we need to be sure of the number of inches in a foot or the minutes in an hour, people in the economy must be certain that their money is an accurate measure of worth,” Forbes and Ames write. The gold standard, they say, would provide the dollar with that stability.
“Capital and investment flow into countries with stable money [which is] the bedrock of prosperity,” they conclude. “Every alternative to a gold standard has been tried, including no standard at all. If something were superior – another commodity or a basket of commodities – we would have found it.”
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