Judy Shelton, Trump’s latest nomination for the Federal Reserve’s board of governors seat is a known gold standard backer and has publicly stated in favour of restoring a gold standard in the country. She has advocated for this firm belief several times and has even hinted at a cryptocurrency-based approach to implement this.
The Gold standard was dropped decades ago by the federal reserve which dictates that the total currency in regulation in a country should be backed by actual gold reserves held by the treasury. But, with gold in limited supply and USA eventually successfully detached from the gold standard and now there is no numerical backing of Gold in the country, allowing the Federal Reserve to inject as many dollars into liquidity as possible.
The restoring the gold standard move has long been one of the demands of the conservative/libertarian sectors of the economy who believe that the current currency model is based on speculation alone and thus not a reliable method to determine the real worth of the circulating currency.
Shelton holds the same school of thought and soon after her nomination got on to say:
“I don’t see it so much as returning [to the gold standard], more like ‘back to the future.’ I think that what a gold standard stands for is monetary discipline for its own sake. Money is supposed to be a unit of account, a reliable measure and a dependable store of value. It really shouldn’t be subject to who’s the chairman of the Federal Reserve.
Her nomination is going to be an interesting chapter in the history of the Federal Reserve that has seen a limited number of such classical ideals holder in the higher echelons especially the top tier of the reserve itself. Shelton even went on to say that the Gold Standard can be revived with a “cryptocurrency based” approach. She has also heavily criticized the working of the Federal Reserve as well. She said:
“How can a dozen […] people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone?…….,
Shelton is not appearing to back off from her current stance and if confirmed, she may shake up things in the higher echelons of the most powerful fiscal regulator in the world.
Image source: pixabay.com
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