September 16, 2023

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As I read about the demise of the U.S. dollar’s status in world trade, I’m struck by the misdirection and irrational “thinking” employed by our politicians and bureaucrats.  In this article, legislators think another law, rule or regulation will solve the underlying problem.  

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Going back on the gold standard is not a bad solution.  Had we been on the gold standard in 2008, the Fed Reserve could not have printed 8 trillion U.S. dollars and driven us into such extreme debt, resulting in dollar devaluation and inflation.  In fact, the gold standard is a good way to limit the Federal Reserve’s ability to print dollars, but this is not the long-term solution.   

Today’s dollar problems are avoidable, with or without the gold standard.  The long-lasting solution is a mindset, a way of thinking, a principle.

First, we need to understand why the U.S. dollar is the reserve or safe harbor currency on which the vast majority of nations and businesses rely for safe, steady transactions.  They must be certain of two things: first, that the value of the currency will not fluctuate rapidly, and second, that the currency remains strong for the duration.  Will the trading currency remain stable so they don’t lose value in the transaction?