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Whether or not the stock market is pricing correctly in a devastating double dip recession remains to be seen.
But gold bugs are still betting that more trouble is coming.
Gold hit a record price today of 1830.
Dollars an ounce during the trading day.
This has my next guest ringing the bell why the United States dollar should return to the gold standard.
A practice ended by president.
Richard Nixon forty years ago this week.
Does He see a growing likelihood or a robbery returned to the gold standard here to discuss.
As the one and only -- -- I say one and only now because we're friends but because you have come to personify the wisdom of the gold standard in America.
So little make for me in in a short -- period as you as time as you can the case for returning to a gold standard so that the dollar is backed by gold as a wasn't a forty years ago this month.
The case for the gold standard is really the case for American prosperity.
America grew from thirteen impoverished Collins by the seat at the founding into the biggest the richest and most powerful country in the world.
Under the gold standard that say the dollar was defined in statute.
As a certain weight.
Of -- gave people confidence to save to invest went well on the golf the dollar is defined in law as a certain weight of gold.
Can the Federal Reserve print cash and flood the market with cash kept the governments spend more money than it takes and as we have been witnessing for the past 100 -- while the exactly -- judge know the answer is no the Federal Reserve is bound by the law.
To redeem every dollar in circulation demand deposits Paper currency.
In a certain weight unit of gold.
And that requires the banks be prepared.
On demand when someone walks into a bank a bank and hands and currency or tells me want to convert their bank deposits in the gold to do so and thus.
The Federal Reserve and the banking system are required to reduce the quality of money in credit ending inflation.
I know that obviously Richard Nixon is -- and you weren't inside his brain but but do you think He understood the ramifications.
The long term effect.
Of the executive order He signed.
On August 15 1971.
When He closed the gold window or separated forever because -- president has has revoked it.
The dollar from gold.
No He did not.
But it's almost a scandal He was He was surrounded that time by some of the most of famous establishment economists.
Who advocated not only the the end of the gold standard or to say a form of the gold standard that Bretton -- represented which was a very flawed form but nevertheless right it's stabilize the dollar more so than it has today.
But He did not eat He was determined to change and the American economic system -- impose the first -- time wage and price controls and American history.
He imposed a 10%.
Tariff unilaterally on all important goods.
And He devalued the dollar -- -- About fifteen years after President Nixon did this there would come a time when you Enron -- would author a minority report on gold.
And that minority report would basically suggesting then president Ronald Reagan that we should return to the gold standard -- little -- asked Ronald Reagan to put us back on the gold standard what it Ronald -- save a little -- oh.
He did in fact asked that question and and in the privacy of his quarters and I gave -- three page memorandum on how we can get from here and there.
I explained it as carefully as He had time to listen He said.
I've always been sympathetic to the gold standard as a matter of fact there is a commercial outstanding which I've seen.
Which is going to be aired which shows Ronald Reagan.
A dollar backed by gold well we have just a few seconds yes or no will -- return to the gold standard in your lifetime in mind shorter -- that reflects five years so you're such an optimist Lou -- it's a pleasure thank you for joining us.
The government goes after S&P.