The transition to a firmer monetary footing to support entrepreneurial capitalism could be initiated by linking major global reserve currencies to gold and silver—commodities long associated with monetary functions. It would logically begin with the dollar. As a first step, U.S. citizens could ask Congress to authorize the limited issuance of gold-backed Treasury bonds that would provide for payment of principal at maturity in either ounces of gold or the face value of the security, at the option of the holder.
The level of public confidence in fiat dollar obligations versus gold would be revealed through auction bidding, with yield spreads clearly reflecting aggregate expectations of their comparative values. In the same way that inflation-indexed Treasury bonds measure expectations about future changes in the Consumer Price Index, gold-backed Treasury bonds would provide a barometer of the Fed’s credibility.
By linking the dollar to gold, Americans would establish a vital beachhead for sound money and provide a model that other nations could emulate.
Two years ago, you were considered crazy – by the mainstream financial/business press (for example) – for saying stuff less extreme than this about gold.