I recall how President Reagan often argued in the 1980s not simply that a strong dollar was in the nation’s interest, but that a great country, by necessity, needs a strong and reliable currency. Link to gold — that was Reagan’s argument. Paul Volcker and then Alan Greenspan (during the first three of his four Fed terms) essentially agreed with Reagan. The 20-year collapse of gold prices that ensued was associated with a remarkable non-inflationary prosperity and a huge stock market rally that generated unbelievable volumes of new wealth for investors and entrepreneurs.
Today, this hard-money thinking is nowhere to be found in official Washington. Yes, the Fed can produce new money. But no, it can’t produce new jobs and growth in any permanent sense. What does? Limited spending, flat tax rates, minimal regulation, and stable money.
Friday, April 29, 2011
Gold Slams Bernanke - Larry Kudlow