In October 1980, Congress enacted a law creating the Commission on the Role of Gold in the Domestic and International Monetary Systems, commonly called The Gold Commission. President Reagan appointed 17 members of the commission.
They issued their report, consisting of more than 550 pages in two volumes in March 1982. You can access these documents, which includes the minority report of the commission primarily authored by Rep. Ron Paul, R-Texas, at http://www.goldensextant.com/library.html.
Because of dissension among the members of the commission, no major innovative policy recommendations were made. The commission did endorse modifications to the then current U.S. Mint gold bullion program of American Arts commemoratives (issued 1980 through 1984) and approved a subsequent program of bullion-priced legal-tender gold coins (which became the American Eagles that began production in 1986). But, other than leaving decisions up to the U.S. government, the commission did not endorse any policies about adopting any kind of gold standard.
Gold coin and bullion ownership had only been re-legalized for Americans since the last day of 1974. So, when this commission met, Americans were largely not thinking of gold as money.
Although few Americans now own physical gold, perhaps only 1-3 percent of the populace, the monetary use of gold is a much more popular topic today. No doubt some of this increased discussion is related to the growing crises related to fiat paper currencies.
Freedom Fest 2012 was held in Las Vegas July 11-14, 2012. On Saturday, July 14, U.S. Senator Rand Paul, R-Ky., told attendees that he was going to recommend that likely Republican Presidential nominee Mitt Romney announce a plan to appoint a new U.S. Gold Commission along with a statement that he would appoint Ron Paul (Rand Paul’s father) as chair. When I talked with Sen. Paul at breakfast the next morning he did not elaborate further on this announcement.
I perceive this idea as more of a political maneuver than a strong hope that the U.S. government may actually seriously consider going back on to some form of the gold standard. Ron Paul’s campaign for the Republican presidential nomination drew a small but dedicated following. His supporters are not automatically fans of Romney. Instead, they may choose to vote for former New Mexico Governor Gary Johnson, the presidential nominee of the Libertarian Party (the party for whom Ron Paul was the presidential candidate in 1988). Or Ron Paul’s supporters may choose another candidate or simply refuse to vote in November. As an attempt to encourage Paul’s supporters to vote for Romney, I think this proposal is politically astute.
However, I personally judge that the decline of the U.S. dollar has already passed the point of no return. I don’t see how any U.S. Gold Commission would endorse any plan that would be radical enough (meaning the effective replacement of the U.S. dollar by gold) to have any chance to be successful at saving the U.S. economy and government. First, I don’t think the commission would make such a recommendation. Second, even if the commission did endorse this radical idea, I don’t see Congress or the President having the backbone to adopt such a recommendation until after the dollar has pretty much collapsed.
By the way, “money” is a creation of the free market, which historically results in much greater prosperity than use of a “currency” issued as a money-substitute by a government. Therefore, I am willing for the free market to decide which is the most suitable money. I suspect that a combination of gold and silver has a strong prospect of initially being the most popular form of money. But I accept that this may not happen in a free market, or that it might only occur for a limited time.
I can dream of the possibilities of a new U.S. Gold Commission next year. But I won’t hold my breath hoping for a miracle result.
Patrick A. Heller owns Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com and http://www.coininfo.com). He also writes a bi-monthly column on collectibles for “The Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.