The gold price fell, dramatically, and now is bobbing about. Meanwhile, the prospects for implementing a 21st century gold standard continues to rise. Dramatically.
In a recent media monetary policy media slugfest between The New York Times and The Atlantic, on one side, and Bloomberg.com and Forbes.com on the other, analyzed here, recently, the gold standard prevailed. It is noteworthy that gold’s victory in that skirmish came in a larger context.
The gold standard used to be consigned, mainly (to borrow a perfectly turned description from the Wall Street Journal’s Gregory Zuckerman and Carolyn Cui) to those with “bleak economic outlooks or dystopian views of society.” Then, many of gold’s proponents could be dismissed, facilely if not quite fairly. The gold standard had been frozen out of elite discourse.
No longer. The discourse has changed.
Whether one supports it or opposes it, the gold standard no longer is seen by most serious thinkers as fringe. It no longer is dismissible merely by invoking shibboleths like “barbarous relic” or “cross of gold.” Facts are stubborn things, as John Adams once observed. Facts are much more stubborn than mere mockery.
There are reasons for the turnaround in the gold standard’s reputation. Rigorous thinkers such as analysts from the Bank of England, in its December 2011 Financial Security Paper No. 13, “Reform of the International Monetary and Financial System", have assessed the performance of the fiduciary dollar standard and found it deeply inferior to the actual performance of both the gold and of the (before it inevitably, due to an inherent latent defect, collapsed) gold-exchange standard. Now, after 12 years of “Dark Ages” economic growth rates, the incumbent monetary policy elites are beginning to appear slightly desperate to justify their prestige and attendant privileges.
Academic economists, almost to a man, still bitterly cling to a hostility to the gold standard. On Valentine’s Day 2012 Prof. Austan Goolsbee memorably tweeted: “Roses are red. Violets are pink. Don’t listen to goldbugs. No one cares what they think.” He thereby threw into doubt his grasp of doggerel, horticulture and...monetary policy.