Gold is gaining favor – and serious momentum – as Republicans actively support returning to the Gold Standard nixed by Nixon on August 15, 1971.
At the Republican National Convention in Tampa, Florida, a gold standard draft platform will be up for approval. The draft requests appointing a commission to analyze “possible ways to set a fixed value for the dollar” much like one proposed back in the early 80s studying “the feasibility of a metallic basis for U.S. currency.”
This motion has received criticism and skepticism by some prominent figures in economics and politics. Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank in San Francisco – he helps oversee $169 billion – doesn’t believe it is a realistic possibility for the United States to actually return to a gold standard anytime soon:
“We all want to go back to the good old days, but when there was a gold standard economic ups and downs were quite common,” said Davidson.
However, the platform statement urges leaders to consider the transition and reconsider the “feasibility of a metallic basis” for the dollar in order to deal with the daunting task of cleaning up the current economic wreckage, arguably a result of Obama’s policies.
Additionally, the statement included a segment advocating for an annual audit of the Federal Reserve and the 12 regional reserve banks, as suggested by Ron Paul.
On August 20, Romney publicly announced that he agrees with Paul on holding the Fed accountable, while also preserving its independence. He still has not “endorsed legislation the House passed last month to have the Government Accountability Office, a watchdog of Congress, audit the Fed, including monetary policy deliberations,” according to sources with Bloomberg.
Meanwhile, the gold-standard study was included as part of the Tampa panel “so we have some language for evaluation to make sure that we have a good, sound monetary policy,” said North Dakota Senator John Hoeven, a co- chairman of the platform panel.
Gold prices are slowly rising, in lieu of skeptics claiming that the gold-standard will not come to fruition even if Romney is elected into office.
From Bloomberg:
Gold futures for December delivery rose 10 cents to settle at $1,672.90 an ounce at 1:43 p.m. in New York yesterday, adding 3.3 percent for the week. Gold is up 6.8 percent this year compared with a 12 percent rally for the Standard & Poor’s 500 Index. Bernanke’s comments drove the benchmark for American equities up 0.7 percent to 1,411.13 yesterday.
The gold standard is unlikely to return because of a lack of international agreement on the matter and insufficient supply, according to the industry-funded World Gold Council.
Ultimately, the gold-standard motion is an attempt to prove to the electorate and the voters that the Republican party is actively concerned about restoring “fiscal prudence” to America.
Brittany Stepniak – Wealthwire – Wednesday, August 29th, 2012