It's Time To Return to a Gold Backed Dollar

"What seems astonishing today could become conventional wisdom in a short period of time," Forbes said.

Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending, the media mogul and former presidential candidate said. The United States used gold as the basis for valuing the U.S. dollar successfully for roughly 180 years before President Richard Nixon embarked upon an experiment to end the practice in the 1970s that has contributed to a number of woes that the country is suffering from now, Forbes added.

With a stable currency, it is "much harder" for governments to borrow excessively, Forbes said. Without lax Federal Reserve System monetary policies that led to the printing of too much money, the housing bubble would not have been nearly as severe, he added.

"When it comes to exchange rates and monetary policy, people often don't grasp" what is at stake for the economy, Forbes said. By restoring the gold standard, the United States would shift away from "less responsible policies" and toward a stronger dollar and a stronger America, he said. "If the dollar was as good as gold, other countries would want to buy it."

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Is It Time For the Federal Reserve to be Brought Down a Peg or Abolished?

Let's learn as Americans all we can about "The Federal Reserve" because they have done much damage to our economy at different times ever since its creation in 1913 with the "Federal Reserve Act". We can only hope now that the great champion of abolishing the Federal Reserve, Senator Paul Ryan the incoming Chairman of the House budget Committee will now be successful at least at reining it in.

If there is a silver lining to the uproar over the Federal Reserve's decision to create $600 billion in new reserves in the next few months, it is the renewed public attention to the Fed's impossible dual political mandate for stable prices and maximum employment.

To be specific, Paul Ryan suddenly has company. The Wisconsin Congressman has since 1999 proposed legislation that would let the Fed focus monetary policy solely on the goal of stable prices. This week he's been joined by fellow Republicans Mike Pence of Indiana and Tom Price of Georgia, while Senator Bob Corker of Tennessee told us he plans to work with Mr. Ryan to introduce legislation next year that would lift the dual mandate. If the 112th Congress did nothing else, this would be worth the price of its election and a major contribution to better economic policy.

These columns have decried the dual mandate since it became the law of the land in 1978 with the Full Employment and Balanced Growth Act, aka Humphrey-Hawkins. To appreciate the problem, consider that in the original Federal Reserve Act of 1913 Congress asked the central bank to supervise banks. It did not mention explicit economic goals. Even in the Keynesian heyday of the Employment Act of 1946, Congress did not ask the Fed to manage the economy.

But with Humphrey-Hawkins, Congress ordered the central bank to "promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates." The political context in that age of Jimmy Carter will sound familiar. U.S. unemployment was stubbornly high and the fiscal policies (tax rebates) of a Democratic Congress had failed to stimulate. So the politicians decided to conscript the Fed in its job creation mission by ordering the ostensibly independent central bank to target employment as well as prices...READ the rest at "The Fed's Bipolar Mandate" at The Wall Street Journal.

Auditing the Federal Reserve!

The Federal Reserve of the United States has a 100 year history of being secretive about its activities. It has NEVER been audited. Yet it has been the major cause of our boom and bust cycles. Please read up on this important issue and sign the petition that this agency get AUDITED. There are 85,500 signers please add your name to this important petition.