A Substandard Golden Rule
by Joseph T. Salerno
Mises.org
The gold “price rule” denotes the monetary reform proposal put forth in various forms by a number of supply-siders, including Arthur Laffer,[1] Robert Mundell,[2] and Jude Wanniski.[3] Laffer’s detailed formulation of the proposal also served as the basis of the Gold Reserve bill, introduced in the Senate by Jesse Helms in January 1981.[4]
The scheme has reared its head once again in H.R. 1576, the “Dollar Bill Act of 2013,” introduced by Congressman Ted Poe, and strongly supported by Steve Forbes.
According to Laffer’s blueprint from the 1980s, at the end of a previously announced transition period of three months, the Federal Reserve would establish an official dollar price of gold “at that day’s average transaction price in the London gold market.”[5] From that date onward, the Fed would stand ready to freely convert dollars into gold and gold into dollars at the official price. In addition, “when valued at the official price, the Federal Reserve will attempt over time to establish an average dollar value of gold reserves equal to 40 percent of the dollar value of its liabilities.”[6] This level of gold reserves Laffer designates the “Target Reserve Quantity.”
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Source: http://financialsurvivalnetwork.com/2013/05/a-substandard-golden-rule/?utm_source=rss&utm_medium=rss&utm_campaign=a-substandard-golden-rule
