One of Robert Frost's greatest poems begins:
Nature's first green is gold,
One is reminded of this in reading Greening the Gold Standard, a long, thoughtful, article published by National Geographic Daily News by Professor Saleem H. Ali, a professor of environmental studies at the University of Vermont, is a National Geographic Emerging Explorer for 2010 and author of Treasures of the Earth: Need, Greed and a Sustainable Future (Yale University Press).
His biography describes him as follows:
Saleem Ali thinks like an environmentalist, a diplomat, a wealthy industrialist, an impoverished villager, a government regulator, a product innovator, and a father. To him, environmental conservation can succeed only if vying factions communicate and collaborate.
Ali facilitates that process as a professional mediator for governments, companies, and indigenous communities; an advisor to the United Nations on environmental conflicts and strategies; a university professor; researcher; and author.
Prof. Ali's observation is well worth taking to heart:
The gold standard unwittingly acknowledged the connection between monetary power and natural resource reserves, which constitute the core of many contemporary environmental ideologies. While the earlier proponents of the standard did not envisage this connection, the “discipline” they sought was the result of the natural limits of gold extraction and the underlying finite gold reserves.
Late last year, the Discovery Channel produced a new reality television series entitled Gold Rush. The program followed a group of unemployed men from the Pacific northwest as they headed north to the Alaskan wilderness in an attempt to strike it rich. Completely inexperienced, the so-called miners leveraged everything they owned to purchase, borrow, and hire the equipment needed to search for gold on a long abandoned claim.
By the end of the summer, at least one of the miners quit and the others were not much better off than when they began. But the dream—the American dream—lived on: to work for something which has inherent value; to ultimately provide for oneself and one's family.
After his testimony to the Senate Banking Committee on March 1st Ben Bernanke was asked a question about the gold standard. His answer:
"It did deliver price stability over very long periods of time but over shorter periods of time it caused wide swings in prices related to changes in demand or supply of gold. So, I don't think it's a panacea, and there also are other practical problems like the fact that we don't have enough gold to support our money supply.... I don't think that a full-fledged gold standard would be practical at this point." [emphasis added]
The idea that there is not enough gold to support a modern day gold standard is a widely held belief among financial elites and novices alike. Ask almost anyone if they are in favor of reintroducing gold into our monetary system and you are likely to hear some version of what Mr. Bernanke said. The problem with his argument, as with so many perceptions about gold, is that it is factually incorrect. Today we not only have enough gold, we have just the right amount of gold to support our money supply.
"Prince William and Kate Middleton’s wedding just got even more groundbreaking. Now those crazy youngsters, who have eschewed a big fat royal wedding for something a little more low key, are reportedly considering using Fairtrade gold for their wedding rings."
We are solidly "small r republican." We look on kings and monarchists as elitist. Yet the story of William and Kate's wedding ring contains an element of interest. Whether worn by prince, princess or citizen, wedding bands are made of gold.
Why are wedding rings made of gold and not... paper? And what does this imply for our currency?
He cites aphorisms and observations by classical economists such as David Ricardo: A currency, to be perfect, should be absolutely invariable in value.