Honest Money Will Require Rediscovering America's Founders

Fed Has No Choice But to Print

Gold last traded at $1,792 an ounce. Silver at $23.87 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday on profit-taking and a firmer dollar. U.S. stocks traded flat as investors took a pause a day after the Nasdaq index closed above 15,000 for the first time ever.

New York Sun--"Fifty years without a gold-based monetary system is not only unprecedented in human history but unfriendly to economic prosperity, too. ..

Most economists who examine the gold standard - a dwindling lot of us - focus on its history or mechanics, regardless of the different forms the standard might take and apart from whether they identify as fans or foes of gold-based money. Most economists today are foes, a pattern that developed in the 1960s. Few would say knowledgeably that they oppose the gold standard because it 'didn't work.'

The fact is that it worked efficiently, elegantly, and nearly automatically, especially when least managed or manipulated by monetary authorities. I contend that gold-based monetary systems were known for facilitating price discovery, profit calculation, private planning, saving and investment, international trade, and - consequently - economic prosperity. Efficient, practical success was most evident in the late 19th and early 20th centuries....

The history illuminates how three distinct versions of the gold standard tracked closely to the prevailing size, scope, and power of the United States government.

A more limited government prevailed under the classical gold-coin standard; it was four decades with free trade, no income tax, no central bank, no welfare state, and no major wars. Subsequent versions were accompanied by massive increases in the welfare-warfare state.

During those versions - between 1914 and 1948 and between 1948 and 1971 - gold money suffered amid wars, deep recessions and depressions, systemic bank failures, and mass unemployment....

What is needed above anything else is a clear and unequivocal endorsement of the classical liberal philosophy held by America's Founding Fathers.

Prospects for a gold-based monetary system in our future are as bleak as are prospects for liberty."