Can the Gold Standard Save the US?

A new Washington Examiner report explains that influential financial publisher Steve Forbes has issued a warning that the United States is facing an economic catastrophe due to the Federal Reserve’s loose dollar policy. Forbes argues that returning to the “gold standard” is the only way to avoid disaster.

In Money: How the Destruction of the Dollar Threatens the Global Economy — and What We Can Do About It, a book he co-authored with Elizabeth Ames, Forbes states that “[the Fed's] vastly misguided monetary policies are now setting the stage for a new economic and social catastrophe — one that could rival the financial crisis and horrors of the 1930s.”

Forbes sees President Obama’s money team as responsible for the stagnant economy, high prices, declining mobility and big government. And, like several of his peers, he believes that economic prosperity will come to pass if the dollar is linked to gold and not printed left, right and center.

“The best way to achieve monetary stability: linking the dollar to gold,” he wrote in the book, which is out today. “The Fed should have only two tasks: keeping the dollar fixed to gold and dealing quickly and decisively with panics.”

Among the list of  economic problems that Forbes blames on the monetary policies are:

  • Weak US economic recovery
  • Slower long-term growth and higher unemployment
  • High food and fuel prices
  • Declining mobility, greater inequality and the destruction of personal wealth
  • Increased volatility and currency crises
  • Larger government with higher debt
  • Lower levels of business innovations and entrepreneurship