Today, Bill Kristol blogged that it might be a good idea for the whole world to go back on the gold standard, or at least have a discussion about the idea.
And it’s worth further asking–as more and more people are beginning to ask–whether a modernized international gold standard, which anchors currencies to a standard outside government manipulation, wouldn’t better serve the interests of free and limited government both at home and abroad. After all, it’s the dollar’s status as a reserve currency that has allowed the U.S. government to amass huge debts, debts which the legislatively imposed debt ceiling has been unsuccessful in limiting. Fiat currency seems to be related to bloated and unlimited government, and to speculative bubbles, and to international instability. Do we just have to live with this, or simply hope for better Fed chairmen?
He also makes a prediction:
… get ready for an interesting and important debate over the next months and years on international monetary policy–which, I predict, we’ll increasingly see as something that needs to be reformed in the direction of a modernized international gold standard, as part of the broader project of re-limiting government, re-establishing sound money and a sound international financial system, and restoring stable and strong economic growth.
Fellow FrumForum contributor Ken Silber notes on twitter that this would require quite a bit of cooperation with China, an observation that is a little jarring given that the Weekly Standard (!) has reported that China is not being a very cooperative nation:
President Hu knows better: Trade, overseas investment, currency manipulation—all, war by other means; all, about the place of nations in the world, a key part of the “strategic direction” in which he is taking his country.
To get a sense of how much can change in under a year, consider this item from Weekly Standard opinion editor Matthew Continetti from April 7th, 2010:
Marginal no longer?
Its worth noting that Kristol seems to be supporting an idea that is similar to what Manuel Hinds advocated in The Wall Street Journal. Hinds recently received $50,000 for his work from the Manhattan Institute.
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