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The New Gold Standard: Rediscovering the Power of Gold to Protect and Grow Wealth

Paul Nathan, Donald Luskin (Foreword by)
ISBN: 978-1-118-04322-6
204 pages
June 2011
The New Gold Standard: Rediscovering the Power of Gold to Protect and Grow Wealth (1118043227) cover image
The guide to returning to a gold standard

All that glitters is gold and gold has never glittered so much as it has in the last decade, reaching staggering new prices in recent years. The definitive modern argument to returning to a gold standard, The New Gold Standard succinctly and clearly explains the nature of sound money, the causes and cures of inflation and deflation, the importance of fiscal responsibility within a sound monetary system, and the reasons for recessions and depressions.

  • Little has been written beyond academic histories of the gold standard, but gold standard expert Paul Nathan fills that void for the first time
  • Written for beginning and professional investors, the book provides guidance on how a gold standard will strengthen the dollar, reduce debt, and help stabilize the economy, offering easily applied strategies for investing in gold now and in the future
  • The degree of depressions and recessions and the boom bust cycle can be avoided with a sustainable, stable monetary policy
  • The international return to gold is not a fad but a sign of a world in monetary transition

As long as governments continue to print money and deficits continue to rise, gold will be a hot commodity. As inflation creeps up, more and more talk will turn to returning to some version of the gold standard, and The New Gold Standard is the first major work to explicitly address the challenges and benefits of such a move.

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Foreword.

Preface.

Part I: Gold and the Domestic Economy.

Chapter 1 Why Gold?

Gold: The King of Metals.

Gold Becomes the Standard of the World.

Too Little Gold—Or Too Much Paper?

The "Gold Prevents Prosperity" Myth.

In Gold We Trust.

Chapter 2 The Gold Standard: A Standard for Freedom.

What Money Is . . ..

. . . And What Money Is Not.

The Nature of Inflation.

The Fiat Standard at Work.

The Illusion of Prosperity.

The Meaning of the Gold Standard.

Chapter 3 Why Prices Have Not Skyrocketed.

On Human Action.

Quantity versus Values.

The Quantity of Money and the Gold Standard.

Too Little Fiscal Responsibility Chasing Too Many Politicians.

Chapter 4 The Inflation/Deflation Conundrum.

The Cause of the Recent Spike in Commodities.

Chapter 5 Central Banking in the Twenty-First Century.

The Rise of Populism.

A World in Transition.

The Fed of the Twenty-First Century.

Part II: The International Gold Standard.

Chapter 6 The Making of an International Monetary Crisis.

Monetary Theory: Past.

No Curb on Governments.

The Policy Makers.

The Process of Confusion.

Condemnation of Gold.

Evolution of the Theory.

Fractional Reserve Banking.

The Great Depression.

Devaluation in 1934.

Bretton Woods.

The Theory Projected.

"If at First You Don’t Succeed . . .".

The SDR: As Good as Gold Again!.

Debt Amortization or Default: The False Alternative.

The Frightening Prospect of an International Debt.

Toward an International Fiat Reserve System.

Simply Repetitious.

The Real Meaning of Monetary Reform.

Chapter 7 The Death of Bretton Woods:.

A History Lesson.

Fixed Exchange Rates, Flexible Rules.

Export or Devalue: Institutionalizing the Devaluation Bias.

"Hot Money" Blues.

The Role of the Dollar under Bretton Woods.

Limited Gold—Unlimited Dollars: A Formula for Disaster.

Confidence versus Liquidity—A Two-Tier Tale.

Gold’s Limitations: A Blessing in Disguise.

U.S. Balance of Payments Problems.

The First Straw.

On Selling One’s Cake and Wanting It Too.

The Illusion of the Last Straw.

The High Price of Gifts.

On Domestic Dreams and International Nightmares.

Chapter 8 Who’s Protected by Protectionism?

A Few Principles.

Enter Protectionism.

Trade between Nations.

To Protect the Balance of Trade.

To Protect Domestic Markets.

To Protect Domestic Wages.

Protectionism: The Greatest Threat to Prosperity.

The U.S. Balance of Payments Problem in Perspective.

The Protection Racket.

Part III: Returning to a Gold Standard.

Chapter 9 Are the Fiat and the Gold Standards Converging?

A Monetary System Needs to Know Its Limitations.

Reduced Leverage Equals Reduced Speculation.

The Process of Convergence.

A New Day.

Chapter 10 Gold: The New Money.

Rediscovering Gold.

The International "Walk" on Gold.

Competing Monies.

Chapter 11 How Not to Advocate a Gold Standard.

The Intrinsic Worth Argument.

The Store of Value Argument.

Gold Price Predictions.

The Legal Tender Argument.

The Official Price of Gold Fetish.

The Devaluation Syndrome.

The Stop Printing Money Argument.

The Demonetization Threat.

On Context, Cause, and Effect.

Part IV: Investing in Gold.

Chapter 12 Lessons of a Life-Long Gold Investor.

On Trading.

The Rules of the Game.

When to Be Flexible . . ..

. . . And When to Stick to Your Guns.

On Investing.

Shakeouts.

Turning a Disadvantage into an Advantage.

On Leverage.

When to Sell a Stock.

"Be Afraid. Be Very, Very, Afraid . . . ".

How to Own Gold 170.

Chapter 13 My Final Word on Gold.

On Bretton Woods II.

The New SDR Threat.

On QE2.

The Banking System of a Free Society.

In Conclusion.

Recommended Reading.

Bibliography.

About the Author.

Index.

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Paul Nathan is an exclusive contributor of articles on gold for kitco.com. With more than one million hits a day, kitco.com is the leading site for gold bugs worldwide. He wrote articles in the '70s for the Freeman and today writes a weekly commentary and market update for hard money enthusiasts and investors at paulnathan.biz. Nathan was there at the birth of the Libertarian Party, and his mother was the first national candidate to run on the Libertarian Party ticket in 1972. Nathan began writing on monetary and economic matters in 1968 while studying under Ayn Rand and Alan Greenspan at the Foundation for the New Intellectual.
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August 08, 2011
The New Gold Standard

As confidence in the U.S. dollar approaches an all-time low, the price of gold continues to soar with no end in sight. For the first time in nearly a century, the question of whether to return to the gold standard is being hotly debated in both the press and academic circles. It isn't hard to see why: in the wake of the global credit crisis and successive rounds of quantitative easing, nervous investors have begun seeing the specter of Weimar-era hyperinflation looming around every corner. But can restoring the gold standard really bring sustained stability to the global economy as its advocates contend, or will it, as its detractors insist, only serve to put the brakes on economic growth?

In his new book, The New Gold Standard (Wiley; June 2011), author Paul Nathan believes the question of whether or not governments decide to make the move to a gold standard has been made irrelevant by the new international gold rush. The market has spoken, and, like it or not, we are already on our way to a de facto gold standard.

Under the gold standard, as first devised by no less a genius than Sir Isaac Newton and refined by Thomas Jefferson and the Founding Fathers, the U.S. dollar had the same buying power at the end of the 19th century as it did in the beginning. During the 20th century, after having moved entirely off the gold standard, the dollar was worth 97% less. But, according to Paul Nathan, that doesn't mean we can simply set the clocks back to 1913. Ever mindful of the realities of a technologically integrated world financial system, he explains the nature of sound money, the causes and cures of inflation and deflation, the roots of recessions and depressions, and the meaning of fiscal responsibility within a sound monetary system. He then describes steps governments can take to gradually reintroduce a gold standard that will strengthen the dollar, reduce debt, and help stabilize the economy. Finally, he offers investors sound strategies for investing in gold now and in the future.

Paul Nathan is an exclusive contributor of articles on gold for kitco.com. With more than one million hits a day, kitco.com is the leading site for gold bugs worldwide. He wrote articles in the '70s for the Freeman and today writes a weekly commentary and market update for hard money enthusiasts and investors at paulnathan.biz. Nathan was there at the birth of the Libertarian Party, and his mother was the first national candidate to run on the Libertarian Party ticket in 1972. Nathan began writing on monetary and economic matters in 1968 while studying under Ayn Rand and Alan Greenspan at the Foundation for the New Intellectual.

 

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