Capitalism/financial crisis: How to repair

I urge President Elect Obama and his staff to consider and implement this urgent suggestion, as it is essential if the economy is going to be repaired and put back on track. I would say that is it THE foundational decision that will allow all other ideas to succeed.

By the way, before you read this, remember I have the "bona fides" of never having voted for a Republican President, going back to the days of George McGovern, the first election that I was old enough to vote in, and as recently as when I voted for John Kerry (in a separate blog I've documented my political history). So when you read this urgent suggestion, do not have a knee jerk reaction that this is coming from "obstructionist Republican" feelings. The opposite is true because I was infuriated when the USA first erred in this problem.

The problem is that the USA should never have left the gold standard for its monetary system. I remember when the decision to leave the gold standard was made, and if anyone would have asked me, I would have told them point blank on the spot that this is a dire error that would ruin the economy sooner or later. And this is exactly what has happened. So I urge you to study and implement the return of the USA to the gold standard with as much haste as is possible.

Young people who read this, you can read on your own details of the gold standard workings. But I will summarize its benefits, no, I don't want to say "benefits," I want to say its "essential service" in two general points.

The first reason the gold standard is necessary is that it guarantees that the USA dollar (USD) will always have a value, and one that is a reasonably high value. It ensures that the USD will not wildly fluctuate or plunge in value. It will always be a worthy and valuable currency because every dollar is backed by gold. All other currencies that peg (determine their own value) against the gold standard USD also benefits from this stability and value.

(You may ask why the USA ever got off the gold standard if this is true, which it is. Don't believe propaganda that you may read. The obvious real reason is this was the birth of people who realized they could enrich themselves by currency manipulation, such as the birth of foreign exchange trading. This decision was made in the early days of when people wanted to "look for the angle" to "make a killing in the financial markets," whether it was good for the economy, the country or even the world, which it most assuredly was not, as recent events of the past twenty years have shown. It's been great for the currency vultures, but not for anyone else. People made enormous money by pushing up and down the value of individual currencies of countries, so they could trade on the differences in current and future value, pocketing the profit. Thus they made money without manufacturing any goods or providing any services, and robbed countries of the value of their currency to provide services and goods to its people. This would be a different and much more prosperous world for the poor and middle class if we had not gone off the gold standard).

The second reason this is important is that it maintains a budgeting mentality for our country. A country that spends outside of its real means cannot and will not survive. It has been the fall of many empires and the cause of much war, when countries spend more than they have in treasure, or can borrow without the collateral of real gold. When the country operates its currency and hence its economy off of the gold standard, to put it very simply, it is like having a genuine savings account and a budget that one cannot spend outside off of and so one has a budget. The country cannot turn repeatedly to the printing press to just run off more money, as the USA has done to the point of today's most dire peril of its very stability. The gold standard forces a budget, but one that can grow (one can always obtain more gold to back up expansion) but it is done in real terms of growth, not imaginary or false growth. Far from denying the country loans, the gold standard guarantees the worth of the USA to those countries who lend it money, and opens up rather that dries up credit lines, which happens in crisis. One is never in peril of disaster when one is operating on the gold standard.

I cannot emphasize how crucial it is that the USA returns to the gold standard with measured but definite haste.

I hope that you find this helpful.