The U.S. dollar is rapidly losing its global influence. Would returning to gold fix these problems?

From The Epoch Times. With inflation plaguing the economy as the U.S. dollar is increasingly being sidelined in international trade, potentially even at risk of losing its status as the global reserve currency, lawmakers in Washington and state capitals are touting gold and precious metals as the solution.

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From congressional efforts that would once again back the U.S. dollar with gold to state-level initiatives to facilitate commerce in precious metals, proposals are proliferating. Some have already advanced.

Private-sector players are getting in on the action, too, arguing that gold can be a defense against economic calamity as foreign governments and central banks stockpile record amounts of precious metals.

In a series of interviews with The Epoch Times, state and federal lawmakers working to restore gold as money argued that this was the best way to defend the dollar, stabilize the economy, rein in government spending, and protect U.S. interests.

A bill introduced in Congress this year by U.S. Rep. Alex Mooney (R-W.Va.), dubbed the Gold Standard Restoration Act (H.R. 2435), would redefine the dollar in terms of a fixed weight in gold. The legislation would also require authorities to exchange paper currency for gold. …

Meanwhile, in Texas, lawmakers concerned about the stability of the dollar and the U.S. economy are working to facilitate commerce in gold through the Texas Gold Depository.

“You have to look at history,” said Texas Rep. Mark Dorazio, a Republican who introduced the bill to facilitate intrastate trade in gold. “Over the last 6,000 years of history, gold and silver have kept their value and served as the standard.”

“It is the go-to in economic crisis and instability—everyone knows you go to gold,” the lawmaker told The Epoch Times in a phone interview. …

Ron Paul, a longtime champion of the gold standard and sound money who spent decades in Congress attempting to draw attention to the issue and wrote a best-selling book called “End The Fed,” told The Epoch Times that gold is likely to play a major role in the future.

As what he called the “Mickey Mouse” dollar continues to lose dominance, “something will have to replace it, [and] now we are seeing that,” he said, warning that “the Chinese are buying a lot of gold.”

Dr. Paul ridiculed the IMF’s Special Drawing Rights and emerging central bank “digital” currencies without inherent value as potential alternatives, saying something tangible such as gold is what’s needed. …

As government debt and inflation continue to grow amid moves by U.S. adversaries to displace the dollar, interest in precious metals will continue to expand, multiple experts told The Epoch Times.

What Happened to Gold?

Until about 50 years ago, the U.S. dollar was still officially backed by gold. Because other currencies were mostly exchangeable for dollars on demand, the global monetary system was in effect underpinned by gold—at least in theory.

In fact, for thousands of years, precious metals have served as money. Economists say this is because they are durable, portable, scarce, and inherently valuable. …

Under the leadership of President Richard Nixon, the U.S. government formally severed the dollar’s final link to gold in 1971, ending the ability of even foreign powers to exchange their dollars for gold.

That was a turning point. Conventional wisdom holds that the move by Nixon resulted in the end of the gold standard forever as most of the world was suddenly plunged into what is known as a “fiat” monetary system. Fiat means the currency has value by government edict, rather than any inherent value. …

The problems with the dollar are growing. As reported in May, U.S. adversaries such as the Chinese Communist Party are actively working to reshape the global monetary system and replace the dollar.

Even traditional U.S. allies such as France and Brazil are now doing international deals in other currencies. …

Calls for major monetary reform at the international level have been steadily growing for decades, and have ramped up further in light of current events.

Numerous world leaders and central bankers, including the People’s Bank of China, have proposed an international reserve currency to displace the dollar, and senior U.S. policymakers have even flirted with the idea publicly. …

Non-Western central banks are buying gold in record quantities, according to the World Gold Council, and analysts expect that demand to remain strong. …

Gold Standard to the Rescue?

Several congressional Republicans who spoke with The Epoch Times pointed to current events to highlight what they say is the urgency of legislation to protect the dollar by once again tying it to gold.

Mr. Mooney of West Virginia, the chief sponsor behind the “Gold Standard Restoration Act,” explained that severing the link between the dollar and gold has produced extreme spending, inflation, and other problems. …

Because the dollar is no longer tied to gold, and because the federal government is rapidly losing the trust of Americans and people worldwide, the dollar’s status as the global reserve currency is at risk, he said. …

But eventually, change may be forced upon the United States.

“If we get to the point where we literally can’t pay our debts anymore—where we default on our loans—it would force some fiscal restraint in our country, but it would also jeopardize the dollar and give a great opportunity for communist China and other countries to not use the dollar anymore as the standard,” he said. …

Aside from restoring the gold standard, Mr. Mooney said it was imperative for the U.S. government to come up with a plan to control spending. “Democrats have absolutely no plan to do that,” he said.

He also warned that if current trends continue, economic disaster is a certainty. …

The only answer is to get back to a real standard where the dollar is backed by gold, he said. “If we got back to the gold standard, at least we would have a restriction there in terms of government spending,” Mr. Mooney added. …

State-Level Gold Initiatives

Lawmakers and analysts told The Epoch Times that currently there is little chance of President Biden signing such measures into federal law. That could change under the next president as the economic situation deteriorates, however.

But at the state level, initiatives to expand the use of gold are proliferating nationwide. In recent years, multiple states have even passed laws declaring gold and silver to be “legal tender,” in line with Article I, Section 10 of the U.S. Constitution.

In Texas, lawmakers are making some of the biggest moves yet.

In 2015, the state approved the creation of the Texas Bullion Depository, which, among other functions, stores precious metals for clients.

Now, a growing coalition of lawmakers and experts are working to use the institution to facilitate trade within Texas using precious metals. …

Private Sector and Individuals

Even without action from authorities, individuals and the private sector can also play a role in protecting themselves from trouble with the dollar, experts in economics and the metals industry told The Epoch Times.

Charles Nenner, a prominent trends forecaster and economic analyst, recommended diversifying investments as a way for individuals to protect their own wealth and savings.

People should “move as many assets as they can out of the dollar since the U.S. dollar is very vulnerable,” he said, suggesting that the loss of confidence in the dollar was part of a broader “super cycle” involving the end of U.S. global dominance. …

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(Excerpt from The Epoch Times. Photo Credit: Jingming Pan on Unsplash)