There are some quotes which one comes across in history which read like typical newspeak and are dismissed by most as “just something for that era.” Then up on reflection, when current events begin to spiral as they tend to do with America’s once every decade financial crises, some self-reflection on how our nation got here might be in order.
This quote stuck in my mind because words quite similar to this have been repeated many times in various yet similar form:
This was America exhibiting its strength and power, dealing with speculative pressures in an appropriate way and seizing the moment to deal with the price question at home, and at the same time there was actually a tax reduction on there. The economy responded favorably; the stock market responded favorably. There had been very ominous predictions of what would happen to the stock market. The stock market went up instead of down.
(1)
The quote above is an extract from an interview, as is this one:
“I have never been able to shake the feeling that a strong currency is generally a good thing, and that it is typically a sign of vigor and strength and competitiveness.”
(2)
All of this sounds like a fighter. A man or men who believed that supporting a strong dollar would suppress inflationary tendencies and block the currency from devaluation in an out of control manner.
Who am I referring to?
One final clue; the current Federal Reserve Chairman Jay Powell is rumored to wish to emulate this individual’s historic actions.
That’s right, the one and only Paul Volcker. Mr. Volcker was one of the architects of terminating the gold standard while he was Under Secretary of the US Treasury for International Monetary Affairs (1969-1974).
Mr. Volcker said this also:
The dollar is the center of the financial system, convertible into gold, with other countries having a fixed exchange rate against the dollar. That whole framework had come under great pressure, and it was clear that something had to be done.
The United States finally faced up to the fact that something had to be done about the international monetary system against a background of this continuing inflationary problem. So the two dimensions came together, the external dimension leading to a suspension of the gold convertibility of the dollar, which itself raised, in an orthodox way, inflationary questions with the devaluation of the dollar and stalled the depreciation of the dollar. There was a good deal of pressure for vigorous action to have some kind of controls, some kind of income policy, something.
(1)
Be careful what you wish for America, the powers that be are not as “in control” as they wish to portray to the general public.
For the record, since the era of Volcker’s actions to devalue the US Dollar by destroying the gold standard, the average individual’s purchasing power is now down well over 85%.
Got gold, because you’re going to need it.
(1) Commanding Heights – PBS Interview, September 26, 2000
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