Jim Rickards On - Will There be a Global Monetary Conference at Mar a Lago?

There are a number of  advertisements out on the internet that talk of the possibility of there some day being a new Bretton Woods style monetary conference perhaps being held at Mar a Lago. It is sometimes called a proposed "Mar a Lago Accord". Obviously, if such a thing did take place, it would have the full attention of this blog since watching for monetary system reform is the primary purpose here.

But is there evidence that such a meeting is being seriously considered or even already planned? This is where things get a bit murky. On the one hand, we can (and do below) cite some highly credible sources who have hinted at such a meeting taking place. On the other hand, no one in the Trump Administration has stated that a meeting like this is under consideration much less actually planned. 

So, where does this idea come from? Below I have listed some links to credible sources where the possibility of some kind of monetary conference at Mar a Lago has been mentioned. However, please note that it is hard to tell if these references are talking about something actually seriously under consideration or just something that seems desirable given the problems and issues that exist in the present monetary system. 

Further below the links, I have pasted in a very recent interview with Jim Rickards where he talks directly about this topic with his latest views on it based on what he has written about it in his new book Aftermath (starts around the 32 minute mark). I will just post the information and let readers draw their own conclusions on this question.

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Jim Rickards comment on Twitter 5-18-2017

Dr. Judy Shelton (from Wikipedia referencing her interview in the Financial Times 5-31-2019)

"In 2019, she said that she hoped for a new Bretton Woods-style conference where countries would agree to return to the gold standard, saying, "If it takes place at Mar-a-Lago that would be great." Mar-a-Lago is a club run by President Trump."

From the FT article: 

"Her big dream is a new Bretton Woods-style conference -- "if it takes place at Mar a Lago that would be great" -- to reset the international monetary system . . . "

Dr. Judy Shelton - Fortune August 2016:

"I’m not opposed to a new Bretton Woods conference, and if it takes place at Mar-a-Lago, I’m fine with that. But anything the U.S. does because we print the international reserve currency, unilateral action would almost instantly be accommodated by other countries."

Dr. Judy Shelton - GSI Exchange article May 2019 (quoting her in a previous Forbes article):

"When asked in a Forbes interview whether a new gold standard can be achieved unilaterally or if nations must convene to the standard, Shelton says “I’m not opposed to a new Bretton Woods conference, and if it takes place at Mar-a-Lago, I’m fine with that.”

Jim Rickards (Mar a Lago comments start at about 32 min mark)

From the interview just above, my take is that Jim sees it as less likely that the present system will be reformed in an orderly way at something like a "Mar a Lago Accord" and more likely we will see a disorderly failure of the present system, perhaps making such a global monetary conference mandatory under more crisis like conditions. His comments on a Mar a Lago monetary conference start just around the 32 minute mark of the interview. These comments are consistent with what Jim has said in other interviews and also to me by email. In addition, I let Jim preview a draft of this article before posting it.

So you see why this question about a potential new monetary conference has arisen and why many people are watching for any signs of it (perhaps in the second term of a Trump Administration if he is re elected). It is interesting to note that most people (including Jim) now feel the odds of a major financial disruption before the 2020 elections are pretty low and that the Fed will do what Trump needs to try and stave off a recession. On the other hand, Democratic candidate Elizabeth Warren is saying she sees a good chance for a new crisis before the next election. Looking at her comments, it is clear now that if a new crisis emerges, Democrats will blame President Trump's tariffs and sanctions for the crisis. Meanwhile, President Trump will blame the Fed as we have mentioned here for some time. Who each side will blame for any economic problems is perhaps one of the easiest forecasts to make.

We will just continue to monitor events as usual here and report what actually happens.

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Added notes: Here is an example of another article where you see this whole idea speculated about. This one appears in NewsMax (Nov 2018) by gold advocate Adam Baratta. This is pretty clearly just speculation (wishful thinking?) by the author. Here is the last paragraph of this article:

"All of this leaves us to ponder the ultimate big idea for Donald Trump. With the G-20 meetings upcoming, and the world’s leaders all set to meet in early 2019 in the United States, what better time for Trump to propose resetting the entire global monetary system with gold? Can you say Mar-a-Lago Accord?"


If you want to see what Jim Rickards is saying on a broad spectrum of current issues, you can take an hour to watch this even more in depth recent interview. 

News Note: Dr. Judy Shelton to Be Nominated for Position at the Federal Reserve

This news comes as no surprise as she has been thought to be the next nominee for some time and had confirmed that she was contacted for the position by the White House. Dr. Shelton kindly took some time last summer to do a brief interview here on her thoughts about the potential for monetary system reform. Below are some links to recent news articles and Twitter comments related to her nomination.

The President also announced he intended to nominate Dr. Christoper Waller of the St. Louis Fed to fill another vacant position on the Board of Governors. If he and Dr. Shelton are confirmed by the Senate, all Board of Governor seats at the Fed would be filled. Dr. Shelton was previously confirmed by the Senate for her current position at the EBRD (European Bank for Reconstruction and Development).

Judy Shelton when appointed to the EBRD

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President Trump's Tweet on the Intention to Nominate

Twitter reply from Dr. Shelton

Jim Rickards Twitter Comment


Wall Street Journal

"President Trump tweeted Tuesday that he intended to nominate economist Judy Shelton, the U.S. executive director at the European Bank for Reconstruction and Development, to become a Federal Reserve Board governor. She served as an economic adviser on Mr. Trump’s transition team and has worked for the Atlas Network, a think tank that has been critical of the Fed’s monetary policy and that has advocated for a return to the gold standard."


NBC News

"President Donald Trump intends to nominate Christopher Waller, executive vice president at the Federal Reserve Bank of St. Louis, and Judy Shelton, an economic adviser to the president during his 2016 campaign, to the Federal Reserve’s board."


The Hill

"President Trump announced Tuesday evening that he intends to nominate Christopher Waller and Judy Shelton to fill the two vacancies on the Federal Reserve board of governors."

NY Post

"Waller previously served as an economics professor at the University of Notre Dame. Shelton is a founding member of the board of directors of Empower America and previously served on the board of directors of Hilton Hotels, Trump wrote in a tweet Tuesday."

The Week.com

"A conservative critic of the Federal Reserve, Shelton served as an economic adviser to the Trump campaign, is U.S. executive director of the European Bank for Reconstruction and Development, and has a PhD in business administration from the University of Utah. Waller is director of research at the Federal Reserve Bank of St. Louis, holds a PhD in economics from Washington State University, and was once a professor of economics at the University of Notre Dame."

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My added comments: Readers here may wish to review some blog articles we have written here that cover Dr. Shelton (see links below).


Her Kemp Foundation Presentation in April 2017


Dr. Shelton calls for Monetary System Reform "linked in some way to gold" (Cato Journal - Spring 2018)


Brief Twitter exchange on her thoughts on a "new common currency"


Dr. Shelton - Her thoughts on the Potential for Monetary System Reform (also linked above)

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One more added comment: Dr. Shelton is sometimes portrayed as being an advocate for a return to a gold standard. However, my reading of her views suggests a more nuanced approach. It seems to me that she realizes a sudden conversion to a gold standard is unlikely to take place as I read and listen to her comments. 

In her speeches and articles I have linked above, please note that she tends to talk more about a possible first step being for the US to issue gold backed government bonds to see how the markets react (not a sudden return to a gold standard). In recent interviews, she has called for lowering the interest rate the Fed pays to banks for reserves over a gradual time frame (she believes this Fed policy may discourage banks from lending to small businesses). So I don't see her as calling for any kind of sudden radical changes. I do expect she would be bold about speaking up for ideas for reform and the proper role for the Fed that she believes in as she has always done in the past. The links above will give you a good overview on some of her views.

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Added unrelated news note: A group of Democrats in the US House issue a letter to Facebook asking them to stop moving forward on the Libra Project until Congress can evaluate the proposal more in depth. Here is one interesting statement in the letter (underline is my addition):

"While Facebook has published a "white paper" on these projects, the scant information provided about the intent, roles, potential use, and security of the Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections. If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability."

News Notes on a Variety of Topics -- John Stossel Reviews "In Money We Trust" PBS Documentary

While we don't see anything on the near term horizon that might trigger major monetary system change, below are some links to some recent news articles on a variety of topics that might be of interest are related to things that could eventually impact monetary system or monetary policy change.

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This article appearing in Fortune asks if Federal Reserve policies have contributed to the income inequality that is fueling debate heading into the next election cycle. Here is a quote from the article:

"Income inequality in America has worsened in recent decades. Many on the left, buttressed by a not-insignificant number of those on the right, have argued for an increasingly progressive income tax code to tackle this problem.

But they’re focusing on the wrong solution—instead, the target ought to be the Federal Reserve."  . . . .  click here for the full article
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Recently, we featured a speech by Agustin Carstens (BIS) that provided an update on the status of central bank efforts to look at blockchain and central bank digital currencies. He stated that process is ongoing, but that most central banks are not moving forward with digital currencies or blockchain so far. This article in Bloomberg does mention some testing going on between Canada and Singapore related to blockchain (see joint statement here). This still appears to be early stage type testing, but is some movement that was recently in the news.
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In the latest BIS newsletter, Agustin Carstens is again featured talking about financial innovation as it may relate to financial inclusion. You can read that speech by clicking here.

"Financial inclusion is the gateway to increased prosperity. Central banks play a key role simply by fulfilling their price and financial stability objectives. At the same time, innovation and technology are needed too."  -- Agustin Carstens

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My added comments: In April and May we have tried to provide a variety of good educational material for anyone interested in the topics covered here. Please skim back over April and May if you have not seen all the articles. There is a lot of good information from a variety of credible sources. 

Related to that, John Stossel produced this article on Reason and the video below summarizing the PBS documentary "In Money We Trust" that we featured here in April.

Other news headlines to keep en eye on that could impact markets: 

- possible release of classified documents related to the investigation of President Trump
- ongoing trade war between the US and China with G20 meeting coming up in June
- US dispute with Iran seems to be ramping up
- any further nominations to the Federal Reserve (Judy Shelton and Derek Kan have been mentioned in recent news articles). In this new interview on CNBC Judy Shelton provides some insight on how she might try to impact thinking at the Fed if nominated and confirmed.

On the above list, the first three are more likely to possibly impact markets than the last one. It seems like no matter what happens, markets just plug along and show no indications that any kind of serious disruption to the existing order is even possible. But we still have to stay alert and monitor events that have the potential to rattle markets.  

News Note: Turkey Issues Gold Backed Bonds

Dr. Judy Shelton points to this article on her Twitter page informing us that Turkey plans to issue gold backed bonds. This is something worth noting. Below is an excerpt from the article.

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From AA.com

"The investors will be paid Turkish lira denominated 1.20 percent semi-annual (2.40 percent per annum) returns indexed to gold price."

The ministry noted that the new securities will be issued with a two-year maturity.

"On maturity, investors may request the principal payment as one kilogram of gold bar (produced by refineries) or 'Republic Gold Quarter Coins' printed by Turkish State Mint," it added."

editors note: One kilogram is about 35 ounces

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Added notes: This news ties in with efforts by Keith Weiner in the US to get the state of Nevada to issue gold backed bonds which we covered here. In some additional news on gold, a Congressman from West Virginia (Alex Mooney) has introduced a bill that would eliminate all federeal income taxation of gold and silver coins and bullion.

Here is an excerpt from the article in Moneymetals.com:

"The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) today introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.

The Monetary Metals Tax Neutrality Act – backed by the Sound Money Defense League, Money Metals Exchange, and free-market activists – would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation."

Hidden Gems from Experts on Monetary Policy and System Reform

Over the past few years this blog has endeavored to explore the potential for monetary system change that could impact the daily lives of all us. This whole topic arose due to the last great financial crisis of 2008. That crisis took most of the mainstream experts by surprise and resulted in a mad scramble by central banks (with some assistance from the IMF) to stabilize the current monetary system.

Now we are a decade removed from 2008. There is still much debate about whether or not the unprecedented and experimental monetary policies employed by central banks around the world have been successful or not.

On the one hand, they did manage to prevent the system from imploding and the world from falling into complete chaos economically. Some view that as success. On the other hand, skeptics and critics say that the policies adopted only delayed the crisis and the asset bubbles that have arisen from those policies insure that when the next crisis does arrive, it will be much bigger than 2008 and likely will take out the present monetary system during the fallout.

All of this is why this blog was launched. The average person who is simply working hard to make a living and provide for a family does not have the time and the expertise to try and keep up with all the various views on the stability of the present system or the odds for a new major crisis. Beyond that, it takes time to try and understand the ideas and proposals out there to fix the mess if we do get "the big one" that so many people from all across the spectrum of views still think is coming some day.

This blog was started in an effort to better understand these issues and to try and assess what the risks to the present system are and to learn what ideas and proposals exist to "fix the mess" if and when we do get the mess. Along the way, an opportunity arose to get direct input from some of the leading experts in the world on this whole situation. That input has been documented here over the last few years, but time has passed. The articles are now what I would call "hidden gems" of information that most people probably won't know about, but I think would find interesting.

This article reviews some of those "hidden gems" so that new readers will know about them and because the input given is still quite relevant today. Below is a summary of some of these gems and bit of background about the experts who offered them.

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Jim Rickards - Jim is probably the most well known expert who has managed to reach the largest audience of people on these issues. Jim has maintained for years that when the next big financial crisis arrives (and he believes it will arrive), that it is likely that a proposal to replace the US dollar with the SDR issued by the IMF will be put forward to "fix the crisis". This thesis is what started the effort here to learn as much as possible about the SDR and any proposals on the table to use it as the new global reserve currency. Here are some articles from this blog where Jim offered direct input for readers here:

Jim offers a comment on the IMF becoming the global central bank of last resort

Jim discusses what he calls the "civil war" going on in Wasington DC

Jim suggests an SDR peg to gold may be in play

Dr. Warren Coats (former IMF - Head of the SDR Division) - There has been lots of discussion in recent years about the prospects for the SDR to eventually become the new global reserve currency. As noted above, Jim Rickards has really brought this issue into public view. But what is the SDR? How could it replace the US dollar? My thinking was that if you want to understand the SDR and how it functions, why not just ask one of the leading experts in the world about it? So, that is what we did here. Below are articles featuring Dr. Coats explaining both the SDR and his "Real SDR" proposal to use as a global reserve currency. You simply are not going to find a better expert on the SDR than Dr. Coats. Here are some articles with his direct input for readers here:

Dr. Coats provides his first insight here on this blog on the SDR

Dr. Coats provides more input in a Q&A style interview

Dr. Coats answers questions from blog readers

Dr. Coats says an SDR proposal is important in case we do get a another crisis

Dr. Coats comments on Cladio Borio (BIS) speech related to SDRs

Dr. Coats explains why allocating SDRs to finance development is a bad idea

Dr. Coats presentation at the Kemp Forum on Exchange Rates and the US dollar

Robert Pringle  - (former Director for the Group of 30) - Robert Pringle is to central banking as Dr. Warren Coats is to the IMF and the SDR. One of the leading experts in the world without question. As Founder of Central Banking publications, he knows and has known central bankers from around the world and written extensively on the subject. After the 2008 crisis Robert, like many, had concerns about policies being implemented to deal with the crisis. He published his book The Money Trap to express his thoughts on the problem and his ideas for solutions. He has been kind to share his wealth of experience and knowledge here from time to time. Here are some articles with his direct input for readers here:

Robert Pringle on why he felt recent monetary policies are immoral 

Robert Pringle offers a proposal for a new global reserve currency - The Ikon

Robert Pringle and Allan Meltzer debate monetary system reform - Part I  --- Part II

Robert Pringle on -- The Necessary Illustionists

Dr. Lawrence White - We happen to share the same name, but Dr. White is the expert on economics and monetary policy. He is a Senior Fellow at the Cato Institute and Professor of Economics are George Mason University. He is also widely respected as a student of the classical gold standard. Here is an article where he pointed me to his work on the gold standard:

Dr. White on Experts and the Gold Standard

Dr. White on how Bitcoin is Like and Unlike a Gold Standard

John D. Mueller - a blog reader connected me to John D. Mueller. Mr. Mueller is the Lehrman Institute Fellow in Economics at the Ethics and Public Policy Center in Washington DC. He offered some direct input for readers on the gold standard and on Lewis Lehrman:

John D. Mueller on Lewis Lehrman and the Gold Standard

Dr. Judy Shelton - Dr. Shelton is currently US Director for European Bank for Reconstruction and Development (EBRD) having accepted that appointment from President Trump. She has long been an advocate for monetary system reform and also has spoken favorably towards the classical gold standard. She recently offered her thoughts on the potential for monetary system reform to readers here in the article linked just below and recently called on President Trump to work towards a new international monetary system:

Dr. Judy Shelton on The Potential for Monetary System Reform

Dr. Shelton Calls on President Trump to initiate a new international monetary system

Dr. Shelton's presentation at the Kemp Forum on Exchange Rates and the US Dollar

Keith Weiner - CEO of Monetary Metals - Keith has proposed a new kind of gold standard that he calls an "Unadulterated Gold Standard". We covered it here and he added some additional thoughts for readers on why he thinks it is realistic that we might see something like this emerge in the future. Keith is also working with the State of Nevada on the idea of issuing gold backed bonds payable in actual gold.

Robert Bell, Founder and CEO of KlickEx - Robert Bell is a widely respected expert on Fintech innovation as it relates to both central banking and the potential to use technology to reform the monetary system. In the fall of 2017, he announced that he was partnering with IBM and Stellar to implement what he called the first institutional scale blockchain based payments system in the South Pacific. Robert has provided ongoing input and acted somewhat as a mentor over the past few years. He has shared his knowledge and experience picked up directly on the front lines of what his happening currently with regards to Fintech. Here is a recent interview he did for readers here with thoughts on the both the current monetary system and what its future may look like:

Robert Bell Comments on the Current and Future Monetary System

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My added comments: There you have it. Direct input from experts on the monetary system we have and ideas on how it could be reformed or even replaced eventually. I will add that I have also gotten of lot of direct input and feedback by email from these experts not intended for use in a public article, but very valuable to me in helping to understand these issues. Hopefully, it has helped me improve the quality of the information presented here.

There are truly some hidden gems of wisdom and information in these articles from some of the leading experts in the world on the topic of monetary policy and the potential for monetary system reform. I would challenge readers to try and find a better collection of experts on these issues anywhere. I don't think it exists and it is my hope that as many people as possible will find this information and share it with anyone interested. 

Readers who want to explore these idea further should go to our market place of ideas for monetary system reform page. It contains all the articles linked above along with some articles with input from some additional experts. There are articles that take a deeper dive into some of these issues there as well.

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Added note - 9-4-18: Today CNBC runs this article saying the the "top quant" at J.P. Morgan (Marko Kalonovic) is warning that in the next financial crisis we will see:

"Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century." 

Mr. Kolanvic is quoted in this article as saying the chances of such a crisis happening are "low until at least the second half of 2019."

I forwarded this article to one expert to see what he thought about this article. He agreed with the magnitude of the crisis talked about in this article, but felt that no one could predict timing and also that the crisis will be too big for the Fed and other central banks to control. He said there is no reason to assume we are "safe" until the second half of 2019.

The Most Important Question Heading into this Fall for My Blog, The US, and the World

Is the Trump Economic Boom a Mirage? 

This is the lead question in a recent article by Jim Rickards that looks at whether or not current Fed policy might lead the US into a new recession. I cannot think of a more important question to consider at this time. The answer to that question will determine if regular blog articles continue here, if the US economy remains strong, what happens to the US dollar, and then even what will the impact be on the entire global economy. 

Below are some excerpts from the article by Jim Rickards and a few added comments. It is hard to overestimate how important the answer to this question really is. If the US economy is as strong as it is reported to be and is able to sustain a higher level of GDP, the political landscape tilts towards President Trump and against any substantial major changes in our present monetary system. This would mean that this blog would likely have little news to report or cover leading to no need for regular articles. Most voters will probably be happy enough to keep things pretty much as they are. The status quo remains likely to stay in place.

On the other hand, if the US economy is not as strong as it is reported be or cannot sustain a high enough level of GDP, the door opens for all kinds of disruption and change. The political environment likely changes. The markets and US dollar are likely less stable. We have to go on alert to watch for signals that another deep recession (or even a new crisis) could emerge. So the the stakes are very high in regards to the answer to this question. Below are some excerpts and then a few added comments.

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from Jim Rickards article - The Fed is on a Collision Course

"Is the Trump economic boom a mirage? The data say yes, but the Fed models say no. The Fed has a long track record of sticking to its model-based approach and missing major turns in the U.S. economy.

Current Fed policy will push the U.S. economy to the brink of recession later this year. When that happens, the Fed will have to reverse course and ease monetary policy. This will send the dollar crashing while gold and the euro soar."

. . . . 

"As for the Trump bump, growth in the first quarter of 2018 was 2.0%, slightly below the average since June 2009. Growth for all of 2017, Trump’s first year in office, was 2.6%, slightly above the 2.14% average in this recovery but not close to the 3.5% growth proclaimed by Trump’s supporters.

In short, growth under Trump looks a lot like growth under Obama, with no reason to expect that to change anytime soon. In fact, the head winds caused by the strong dollar, the trade wars and out-of-control deficit spending may slow the economy and bring future growth down below the average of the Obama years.

Into this mix of weak growth comes the Federal Reserve, which is tightening monetary policy, reducing the base money supply and supporting a strong dollar. All of these policies are associated with slower growth ahead, an inverted yield curve and a high probability of recession."

. . . . 

"Simultaneously, the Fed is reducing its balance sheet (destroying base money) at an annual tempo that will reach $600 billion per year by end of 2018. This policy is completely unprecedented in the 105-year history of the Fed, so its economic effects are unknown.

My estimate, and that of others, is that this balance sheet reduction policy is equivalent to four 0.25% rate hikes per year on top of the four already planned. The combined effect is the same as the Fed raising rates 2% per year off a near-zero rate base as recently as December 2015.

Bearing in mind that monetary policy works with a 12–18-month lag, this extraordinary tightening policy in a weak economy is almost certainly a recipe for a recession.

Why is the Fed tightening if the economy is fundamentally weak and the probability of a recession is so high?"

. . . . . 

Click here to read the full article and see Jim's answer

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My added comments: This article lays out very well a situation I have been monitoring in terms of what to do about regular blog articles here. If the US economy holds up and really does sustain a strong level of GDP, not much is likely to change very soon. Most people will be happy (or at least satisfied) and the present system is unlikely to be at major risk for a game changing crisis. As I have mentioned here, there is no reason to continue to try and cover an event that is not happening (major monetary system change) just for the sake of trying to produce regular blog articles.

On the other hand, if the situation goes the other way, things could change a lot and then the door to major monetary system change could also open up. Just imagine if things do go south with the US economy. Political opponents of President Trump will seize upon the situation to disrupt his agenda and undercut his political power base. I think it is reasonable to guess that President Trump will point a finger directly at the Fed as the cause of the problem (too tight monetary policy). This would be a very messy situation with all kinds of potential for disruptive changes with the huge political divide that exists today in the US and the country essentially split in half. 

Also, it is not as though no one is urging the President to be more proactive on the concept of monetary reform. The Wall Street Journal recently called on him to use the current environment to educate the public on why reform is needed and start the process. Dr. Judy Shelton has said this might be the right time to think about monetary system reform. The New York Sun has gone a step further in this article and suggested that if the President does not become more proactive in educating the public on this issue and seizing the opportunity, he may find himself in some political trouble if the economy does take a downturn.

This is why I originally decided to see how things go until this fall in terms of future regular blog articles. By the time the November 2018 elections take place, we should have a decent idea where things are headed. The 2018 mid term elections probably either keep the Trump Administration economic agenda in place or severely disrupt it if the Democrats take control of the US House of Representatives. If the Trump economic boom shows signs of being a mirage before the elections, the prospects for change go up. If the economy seems to be doing fine, the prospects for major change go down.

It's a gigantic question and the answer has worldwide implications. We won't try to make any predictions here. All we can do is just observe what actually happens and report it. 
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Added news notes 8-27-18:

Another article calling for monetary system reform - this one says events in Turkey provide another example as to why it's needed. Here's a quote from the article:

"The lesson to learn from the Turkish crisis does not only concern Turkey. It is one more crisis which calls for a reform of the international monetary system."


CNBC - US - Mexico reach trade agreement and new NAFTA deal anticipated

CNBC - Markets not worried about Trump because of the "Pence Put"

The True Gold Standard - A Monetary Reform Plan Without Official Reserve Currencies

A thank you to a blog reader (a former correspondent for Time magazine who prefers to remain anonymous) who alerted me another formal proposal to consider a return to the gold standard. In an earlier article, we featured the work of Dr. Lawrence White who also speaks favorably about returning to the gold standard. In that article, I made this comment:

"There are a variety of ideas on how gold might return to the monetary system, but until I learned of this information from Dr. White I had not run across a formal proposal for how to transition back to an actual gold standard."

The blog reader mentioned above picked up on that comment and sent me an email that encouraged me to look at another proposal for returning to a gold standard. The reader had this to say:

"In your June 23rd post:  "Dr. Lawrence White - Experts and The Gold Standard” you cite a range of proposals “for how to return to a gold standard.”   Let me add to it the following work:  The True Gold Standard - A Monetary Reform Plan without Official Reserve Currencies (Second Edition - Newly Revised and Enlarged). "

I am also advised from the reader that John D. Mueller made some contributions to the book linked just above. Mr. Mueller is The Lehrman Institute Fellow in Economics at the Ethics and Public Policy Center in Washington DC. He was a featured speaker at the Kemp Forum in Washington DC that we covered here earlier this year. The book was authored by Lewis Lehrman and offers his view on why we should return to the gold standard. Mr. Lehrman served in Reagan Administration and was on the US Gold Commission along with US Congressman Ron Paul.

I reached out to John D. Mueller for any comments he might have on the book. He replied with these comments:

"Lewis Lehrman is a remarkable man. Trained as a historian at Yale and Harvard, he became a successful businessman (helping found Rite-Aid drugstores)—in Lew’s telling, after Lew’s graduate fellowship was cut by 25% and Lew’s father remarked that perhaps he should try a field with more economic promise. Lew made and spent a couple of fortunes supporting public-spirited efforts including international monetary reform. One website organized by The Lehrman Institute,thegoldstandardnow.org, is a treasure trove of articles on sound monetary reform, and includes extended interviews with experts like Lew Lehrman and Dr. Larry White. Lew Lehrman’s occasional op-ed articles are also a crash course in American history: http://www.lewiselehrman.com/history.html. He has probably done more than anyone to explain the importance of Abraham Lincoln. And he has just published an excellent and interesting book on Roosevelt, Churchill and Company.

I can join in heartily recommending the book mentioned to you by your blog reader, The True Gold Standard - A Monetary Reform Plan without Official Reserve Currencies (Second Edition - Newly Revised and Enlarged). 

 (My role was limited to providing charts and appendices for the second edition.) In it, Lew Lehrman answers the question, how would one actually implement a workable gold standard? The provision mentioned in the subtitle—that any new system must eliminate official “reserve currencies”—is vital to the success of such a plan. I discussed the reasons in my recent talk at the Jack Kemp Foundation forum on exchange rates and the dollar."    --- John D. Mueller

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My added comments: Interestingly, in his presentation at the Kemp Forum earlier this year, John D. Mueller said he felt these were the three main alternatives for the global monetary system in trying to solve its problem (The Triffin Dilemma):

a)  muddle through until the (US) dollar standard's collapse.

b)  turn the IMF into a world central bank issuing paper (SDR) reserves.

c)  turn to a modernized international gold standard.

This is pretty much what we have been saying here on this blog as well. I will add that the Real SDR proposal (Dr. Warren Coats) that we have featured here is somewhat different than option (b) above as I understand it. While it does involve using the SDR as global reserve currency, it would change IMF rules so that the currency was issued under Currency Board rules (based on public demand, not IMF discretion) and also would anchor it to a basket of goods (not to the five currencies in the current SDR basket). I do not believe Dr. Coats supports giving the IMF arbitrary discretion to issue SDR's. Readers can look into this more in depth in this recent blog article. Robert Pringle has another more "out of the box" proposal he calls The Ikon also covered in that article.

At this point in time, it seems as though we are clearly still under option (a) above. This blog watches for any indications that change from option (a) might be underway to option (b) or option (c) or something else. These days some believe that something else might be decentralized cryptocurrencies (not issued by any central bank). Cryptocurrencies seem like the least likely alternative to me for a variety of reasons to lengthy to discuss here, but there are people who think otherwise. We covered what we think is the current status of cryptocurrencies in this recent article. Our goal here is to present readers with what we believe are the most likely scenarios for monetary system change and encourage them to learn as much as they can about them. 

We greatly appreciate all the contributions from the various experts we have featured here on various ideas and proposals for monetary system change. Readers here benefit from their knowledge and generosity. I would like to add a special thank you to John D. Mueller for taking time to offer his thoughts included above. 

Added note:  I received this additional comment by email from John D. Mueller. He kindly granted permission to add it to this article:

"Since option A is inherently doomed, I think we will wind up the only sustainable option, option C, after more or less painfully exhausting the alternatives."

All the best,

John

*****

John D. Mueller

The Lehrman Institute Fellow in Economics

Director, Economics and Ethics Program

Ethics and Public Policy Center (40th Anniversary)

1730 M St. NW, Suite 910

Washington, DC 20036

Dr. Judy Shelton agrees with John D. Mueller in this Twitter comment.