On Aug. 18, Dr. Judy Shelton sat down with Fortune Magazine for an interview on the state of affairs in finance and economics. And during her interview, Dr. Shelton provided her opinion that the United States should lead the way for an international return to some form of a gold standard, and perhaps beginning it with the use of gold backed bonds.
Besides being an economist in her own right, Dr. Shelton is also on Presidential candidate Donald Trump's economic advisory board.
You’ve written before about going back to some sort of gold-based monetary system. Is that something the U.S. could do unilaterally, or would we need to convene other nations and get them on board?
I’m not opposed to a new Bretton Woods conference, and if it takes place at Mar-a-Lago,
I’m fine with that. But anything the U.S. does because we print the international reserve currency, unilateral action would almost instantly be accommodated by other countries.
In terms of gold being involved, some people may think of that as a throwback, but I see it as a sophisticated, forward-looking approach because gold is neutral and it’s universal. It’s a well-accepted monetary surrogate that transcends borders and time. If you look at the foreign reserves of the most important countries, they keep them mostly in gold. I don’t want to read too much into it, but it proves that gold is not some barbarous relic.
Would the first step in that be issuing gold-convertible bonds?
Don’t attribute this idea to the Trump campaign, but it has been something that I have been proposing for years now. A gold-backed bond was first proposed in 1981 by Alan Greenspan. I think the U.S. should issue them as an experimental pilot program, similar to the TIPS bond, that compensates people who are concerned about the future value of the dollar. For those who are concerned about a big financial meltdown, these bonds would give them some insurance, as gold tends to rise in price during periods of financial stress. - Fortune Magazine