A recent op-ed in the New York Times has elicited an avalanche of response from all sides of the conversation and prompted the publishing icon to provide a forum for the conversation to be carried out. Experts and neophytes, gold bugs and gold detractors alike are weighing in. The important point is that the conversation is growing.
Whether you support a return to the time-tested gold standard or support a move toward more Keynesian methods of the US spending its way out of poverty, the fact of the matter is: the conversation continues.
In spite of what many experts called a slight recovery over the last year, concern over the current state of the economy is what more and more people are talking about. One can only imagine the amount of armchair educations that are being gained as the discussion brings the issue to more dinner tables and water coolers. Tom in Brunswick, New York commented on the NYT article stating “I often half joke with the cashier at the diner -‘I assume you still accept federal reserve notes?'”
The Bank of England once had an unhappy experience with this method of operation. To fight the Napoleonic wars of the early 19th century, Britain traded in its gold pound for a scrip, and the bank had to decide unilaterally how many pounds to print. Lacking the information encased in the gold standard, it printed too many. A great inflation bubbled.
Later, a parliamentary inquest determined that no institution should again be entrusted with such powers as the suspension of gold convertibility had dumped in the lap of those bank directors. They had meant well enough, the parliamentarians concluded, but even the most minute knowledge of the British economy, “combined with the profound science in all the principles of money and circulation,” would not enable anyone to circulate the exact amount of money needed for “the wants of trade.”