Logan Flatt has posted a letter he sent to his congressman:
Thank you for your email. The Republican proposal is a step in the right direction – 180 degrees away from the $700 billion taxpayer funded bailout of America’s most financially inept and irresponsible.
As a recognized expert in finance and investments, I strongly encourage you to add to this new Republican proposal a change in the U.S.’s current monetary policy where the printing of fiat money is the knee jerk response to almost every financial problem on Washington’s radar screen. The booms and busts that the American economy (and thus, the global economy) has experienced over the past 37 years have been due to the floating U.S. dollar, the value of which changes continuously and has fallen dramatically since 1971 when Republican President Richard M. Nixon effectively broke the 1944 Bretton Woods Agreement by reneging on the gold-redeemable, fixed U.S. dollar upon which the post-WW II world financial order was based. Since then, the floating U.S. dollar and Fed-driven growth in the U.S. money supply are the double-whammy that repeatedly leads investors to ‘irrational exuberance’ and ultimately, malinvestment and economic crisis – the likes of which we are witnessing today.
The solution to this systemic problem is a return to a fixed U.S. dollar, redeemable for the gold ounces in the Federal Reserve’s reserves or not. As is stipulated in Article 1, Section 8 of the U.S. Constitution, the U.S. Congress should immediately redirect the Federal Reserve to manage the U.S. money supply according to a fixed gold price instead of according to the fed funds rate or any other interest rate under the Fed’s own control. That way, every American and every foreigner will know – and trust – the value of the U.S. dollar because it has a fixed reference point in gold ounces. The actual reference point chosen (1 USD = 1/1000th of an ounce of gold?) doesn’t so much matter as the fact that a reference point is chosen and that the reference point doesn’t change for many years to come.
Such a change in U.S. monetary policy should minimize disastrous booms and busts going forward. It is the type of monetary policy that led the U.S. to economic greatness from 1900 to the late 1960s. It is the same monetary policy that can help solve our current economic problems and can lead the U.S. to still greater economic results for all Americans. All policymakers in Washington, D.C. need to face the facts: America’s grand experiment with a floating U.S. dollar since 1971 has been a complete and utter disaster. Please take action today to help summon the courage among your fellow Republican Congressmen to add this very important change in U.S. monetary policy to the current Republican proposal. It is the one change that would help put all this economic madness to rest once and for all.
Logan Flatt, CFA
Dallas, Texas 75230
I feel the same as Logan. The gold standard worked for a long time and we’ve had nothing but misery since we left it. It is time to back to the tried and true.