Jeffrey Bell: US Must Return to Gold Standard to Avoid Dollar Disaster
Thursday, 15 Dec 2011 03:26 PM
Since the recession, the Federal Reserve has kept interest rates low — they're near zero now — and has bought assets from banks with what critics charge is money printed out of thin air to spur the economy, a policy known as quantitative easing.
Calls are increasing for a return to the gold standard, which ties the value of the dollar to gold and was abandoned in the 1970s.
The gold standard would limit what the U.S. could borrow, but as Bell pointed out, such a currency regime would do away with excessive spending and inflationary threats that today's loose monetary policies are unleashing on the economy and eating into personal savings.
"I think it's disastrous. For one thing, Ben Bernanke and the Federal Reserve don't seem to know how to get away from having a zero interest rate regime that makes elderly and middle-class people unable to save at their local bank," Bell told Newsmax.TV in an exclusive interview.
"It is true that the gold standard restricts the amount you can borrow, or at least borrow without having a good reason. But that's been precisely the problem," said Bell, author of “The Case for Polarized Politics: Why America Needs Social Conservatism.”
"Really the dangers are much greater than remaining with the present, debt-driven system than returning to a dollar that has independent value," said Bell, a two-time campaign adviser to Ronald Reagan.
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