domingo, 5 de setembro de 2004

The Case for a Genuine Gold Dollar

"(...) During and after World War II, the inflationary pyramiding directed by the Federal Reserve became ever more top-heavy, and a return to a $35-an-ounce dollar would have risked a massive deflationary contraction of money. For that reason, such dissident members of the Economists' National Committee as Henry Hazlitt, and other economists such as Michael Angelo Heilperin, Jacques Rueff, and Ludwig von Mises, began calling for return to gold at a "price" much higher than $35.

These dissidents were virtually all in the Austrian tradition, and the three names in the text were all either students or followers of Ludwig von Mises.

In the light of later developments in the gold market, it is amusing to note that the Rueff-Hazlitt proposals for a gold dollar at $70 were scorned by virtually all economists as absurdly high, and that before 1968, monetarists and Keynesians alike were unanimous in predicting that if ever the dollar were cut loose from gold, the gold price would fall precipitately to its nonmonetary level, then estimated at approximately $9 per ounce. It is equally amusing to consider that most of these economists would still subscribe to the motto that "science is prediction."

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