In 1944, the world leaders that gathered in New Hampshire decided on a system based on gold. This was no innovation, as monetary systems for the past few centuries had also been based on gold. In the Bretton Woods system, the dollar was pegged to gold at $35/oz., and other currencies were pegged to the dollar. Currencies didn’t float in those days. Floating, manipulated currencies were considered an abomination. Exchange rates remained fixed…
November 21st, 2008 | Nathan Lewis | 1 comment | ContinuedArchive for Nathan Lewis
Nathan Lewis is the author of Gold: the Once and Future Money, published by Agora Publishing and J. Wiley. He runs an investment fund in Westport, Connecticut.
“The Battle for Investment Survival” is a Classic that is Still in Print Today
In 1935, a stockbroker named Gerald Loeb wrote a book called The Battle for Investment Survival. The dramatic title might be ascribed to the dramatic period in which it was first published. Disaster-mongering books were popular in the late 1970s as well. However, in the book (which was revised in the 1950s and 1960s), Loeb makes clear that the “battle” he had in mind was with inflation…
September 4th, 2008 | Nathan Lewis | 0 comments | Continued
Debunking Inflation Myths
Gradually, people are becoming aware that we have an inflation problem, which seems to stretch around the world. Perhaps it is time to think about how to resolve it. Certainly a few coy remarks by some Federal Reserve representative aren’t going to be effective.
July 3rd, 2008 | Nathan Lewis | 5 comments | Continued
A Gold Standard, Without Gold
If you understand supply and demand, you can peg a currency to gold even if there are no gold reserves at all. My own idiosyncratic system is the gold standard that involves no gold at all. There are no gold coins, and no government gold reserves. Gold bullion is freely traded on the open market, just as it is today. In my system, the currency manager (governments today) would adjust the supply of currency on a daily basis to maintain its value at the gold peg.
May 7th, 2008 | Nathan Lewis | 6 comments | Continued
Exchange Rates Aren’t a Problem When Currency is Pegged to Gold
In the 1970s the world’s currencies were pegged at fixed exchange rates to the dollar, while the dollar was pegged to gold. After the dollar left gold in 1971, and its value declined, other countries’ governments said: “Hey, wait a sec. I’m not sure of what you’re trying to do with this cheap-dollar stuff, but we don’t want any part of it.” So, in the spring of 1973, they all depegged from the dollar. See ya later, greenback!
February 20th, 2008 | Nathan Lewis | 1 comment | Continued
OPEC Should Return to a Hard Currency Standard and Drop the U.S. Dollar
OPEC had a problem. They were selling their oil and getting dollars in return. However, the dollar was losing value quickly. They worried that, in the future, the dollar might not be worth very much at all. They would have sold their irreplaceable natural resources for a paper promise from a country that didn’t keep [...]
January 10th, 2008 | Nathan Lewis | 6 comments | Continued
A History of the Gold Standard
It appears that we are slowly drifting into a period of monetary turmoil. Turmoil leads to change, and ideally the result of a widespread desire for change will be the establishment of a new gold standard. Indeed, there are some indications that this may be achieved by the end of this year, although it may [...]
April 6th, 2007 | Nathan Lewis | 0 comments | Continued
“Investing” in Backpacks for 2007
Of all the “investments” one might make at this time, one of the best may be to be prepared for a breakdown of the economy as we know it. This is not necessarily a prediction - any more than having fire or flood insurance is a prediction that you will have a fire or flood. [...]
January 12th, 2007 | Nathan Lewis | 2 comments | Continued