Returning to the gold standard makes so much sense — in theory. And even the briefest thought of taking control of the currency away from Washington sends a thrill down my leg. “Money they can’t monkey with,” would be a fine slogan for the campaign, don’t you think?
But getting back to a gold standard in practice reminds me a lot of asking for directions in Maine: “You can’t get there from here.” Where is the government going to get the gold? What price would sellers accept for it, given that our finances are in such good shape? And what confidence would people have in a new gold standard? After all, we used to have one, until it was squandered away by Washington, starting with FDR and ending with Nixon.
There’s one way to get back to the gold standard I’d never thought of before: By fiat. And that’s what occurred to me when I read that gold just passed $1,800 an ounce, and is maybe on its way to $2,500 by year’s end.
So people, acting as individuals, might just be restoring the gold standard all on their own.
I know what I’m seeing, and I haven’t yet lost faith in the ingenuity and, yes, thrift of a majority of Americans and a nice plurality of people around the globe. There doesn’t have to be a central actor to return us to a gold standard. All it takes is millions of people acting in their own, individual best interests to guide their hurting economies to a beneficial resolution — a sort of “invisible hand,” if you will.