Dear Monetary Policy Observer,
The financial media has been overjoyed by the dollar’s strong run over the past several weeks. APIA senior economics adviser Ralph Benko points out that while cheapening the dollar is bad for the economy, the “King Dollar” status as a reserve currency may have cost the US economy 6 million jobs, according to Dr. Jared Bernstein, the chief economist to Vice President Biden.
Benko calls for a return from “King Dollar” to a “high integrity, meticulously defined, dollar” pegged to gold as a way to sustain middle class growth.
We hope you find this material of interest.
American Principles In Action
The reserve currency status of the dollar, particularly as a potential factor in wage stagnation, has profound political implications. Dispirited voters yearn for leadership that actually understands how to get the economic tide to lift all boats again. Notwithstanding his promotion of some marked policy differences with this columnist, this columnist says three cheers for Dr. Bernstein for squarely pushing the reserve currency question into play.
[...]A dollar at the mercy of a freelancing Fed, subject to being whipsawed in value, up or down, is a barrier to commerce. Money, by definition, is a medium of exchange, a store of value and — not be overlooked — a unit of account. There are many empirical data tending to show that only by meticulously maintaining the definition of the unit — for example, by defining the dollar by grains of gold and making it legally convertible thereunto — can good job creation, and equitable prosperity, consistently be achieved.
Read the full article here: http://www.forbes.com/sites/ralphbenko/2014/09/29/the-rise-and-fall-and-rise-and-fall-of-king-dollar-part-1/