The Bryan Ellis Investing Letter reports rumors of increasing interest amongst the GOP to return to the gold standard. Come the convention in Tampa next week, the Republican Party is likely to propose an audit of the current Federal Reserve monetary policy and suggest restoring the link between the dollar and gold.
As one party member explained, the move is an attempt to prevent the Fed from “printing our way to prosperity.” If the policy is indeed adopted, it will be the first time since 1984 that it has been part of the Republican Party platform, and over 30 years since Ronald Reagan created and added the “gold commission” to the party’s policy in 1981.
Skeptics of the proposal, like Federal Reserve chairman Ben Bernanke, argue that the U.S. dollar is currently valued at a fixed price per unit of gold dollar and will become rather volatile because “the gold standard [leaves] no discretion in the banking system over interest rates or the money supply.”
This is an important one to keep an eye on. Should the GOP adopt the gold standard and ultimately implement it, experts expect its value to head well north of its current levels.