Tuesday, February 26, 2008

The Resurrection: Lawrence H. White Defends the Gold Standard

It's time to break out my mantra again:

You can take gold out of the standard, but you can't take the standard out of gold.

How many times will I say this before the world hears me? Probably many, many more, if ever.

Finally, someone in the mainstream economic community has taken up the cry to resurrect the gold standard.

[Thanks to Allposter.com for the image of Caravaggio's Resurrection of Lazarus.]

Lawrence H. White, Adjunct Scholar at Cato, has just published this paper on gold and the gold standard.

I have written so much on this subject that I would be repeating previous posts to delve into the reasons why I support gold as a standard for modern monetary units. If you use the search feature above and look on this blog for "gold standard" or just "gold," you'll find dozens.

Please read Professor White's paper. An understanding of the principles he evokes is essential for the future economic stability of the world. And that's not an overstatement.

Will the politicians and power brokers take heed of the message? I don't think so; at least not yet. But they may be obligated to do so at some point if the public insists enough.

The history of gold is undeniable, and its future role--indeed its present role, albeit an unrecognized one--is just as undeniable. It's not because the monetary authorities have decided to uncouple gold from our currency, that gold does not retain its value as a measuring stick of their management shortcomings.

Gold is near an all-time high today. Many people in the world think as I do, that we humans need a measuring stick to manage out monetary unit. Until our leaders recognize this, expect gold to be the best store of value and to come back into favor as the currencies of the world are devalued through mismanagement.

Unfortunately, nothing in our modern age allows us to do better than the Romans or Greeks, or Medieval or Renaissance governments. Not the computers, not the modeling, not the statistics, none of it. Gold is on the level of the invisible hand. It is just there and will always be there to shine a light on our politicians' hubris.

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