Can The Dollar Once Again Be Anchored by Gold? One Congressman Believes It Can
The comments below are an edited and abridged synopsis of an article by Thorstein Polleit
In October, US Congressman Alex Mooney (R) introduced the Gold Standard Restoration Act, a bill stipulating that the US dollar must be backed by physical gold owned by the US Treasury. The initiative clearly indicates that the increasingly inflationary US dollar is triggering efforts to get better money.
There have been many legislative changes to make precious metals more attractive as a means of payment in recent years. In many US states, the value-added and capital gains taxes on gold and silver, but also on platinum and palladium, have been abolished.
The proposal is divided into three sections: The need for a return to a gold-backed dollar; the technical process for re-anchoring the dollar to the official US gold stock; and how a fair gold price in dollars can develop in an orderly manner within thirty days after the bill has taken effect.
At the bill’s core is the idea of tying the dollar to physical gold once again, based on a fair gold price freely determined in the market.
Once the dollar is re-anchored in gold, chronic inflation will end; monetary policy-induced boom-and-bust cycles will end; the world will be more peaceful because financing a war with a gold-backed monetary system will be expensive, and the public will not want to bear the cost. However, there is still room for improvement. Any gold standard restoration act will deserve unconditional support when it paves the way for a truly free market for money.
In a truly free market, people will choose the good they want to use as money. In a truly free money market, the state loses its influence on money and money production. In fact, the state and special interest groups that exploit the state no longer determine what kind of gold (coins and bars, cast or minted) can be used as money; the state is no longer active in the minting business and cannot monopolize it; there is no longer a state-controlled central bank to intervene in the credit and money markets and influence market interest rates. Let’s hope that Mr. Mooney’s Gold Standard Restoration Act will pave the way to reforming the US dollar currency system—and that it will eventually move us toward a truly free market in money.