The Whole Money Thing

In Me and Ron Paul and The Dollar is Falling! The Dollar is Falling!, I discussed central banking and the currency base.

However, in 800 Dollar Gold in Plain English ( archived copy ), Jerry Bowyer adds a little more to the discussion. His primary point is that the theories being pushed in support of returning to a gold (or silver or whatever) are not nearly as robust as they seem, especially in light of recent history. Some of his comments echo mine in Me and Ron Paul, but mine were more gut feel than anything else.

Of course, the problem with Jerry Bowyer’s commentary is that begs the question, what to do? Who knows? However, I think the major point is that we cannot blindly assume that what seems to have worked in the past actually did, and that it will work for the future.

That all being said, the U.S. trade deficit is definitely an issue. We can’t keep sending money out (whether to China for our manufactured goods, or Mexico, Venezuela, or the Middle East for our oil). A lot of countries have been putting money back into the U.S., because we have historically had a stable currency. That is not the case now.

On the other hand, maybe this is a good thing for domestic manufacturing, especially with all the toy recalls recently. Perhaps companies will finally look at the U.S. as a valid source. The U.S. must continue to excel in changing things for the better. As long as we do, it will all work out in the end.