|Lackluster economy could lead to next gold rush|
|Politico, Josh Boak, 12/10/2011 (traduire en Français )|
At The Heritage Foundation’s Conference on a Stable Dollar last week, former Bush economic adviser and Federal Reserve Governor Larry Lindsey said the weight of history leaned toward gold.
American families took on too much debt during the housing bubble. The government responded to the ensuing meltdown by leveraging up its own balance sheet by trillions of dollars. And the strain of navigating through the debt is more than the Fed’s Open Market Committee, which controls the money supply, can endure.
While Lindsey believes the Fed has done an admirable job, he doubts the 19-member committee can resolve the competing pressures better than a dollar pegged to gold.
“None of these guys are gods,” he said. “Nineteen men trying to adjudicate these demands will disappoint society.”
President Richard M. Nixon officially ended the gold standard more than 30 years ago. While the precious metal can foster a stable currency, it can also have downsides. A reliance on gold limits how much money could be flushed into the economy during a downturn, one of the key strategies for combating a recession.