Three U.S. congressmen — Alex Mooney, Andy Biggs and Paul Gosar — have introduced a bill to stabilize the value of the dollar by associating it with gold. More specifically, the “Gold Standard” bill intends to facilitate the re-pegging of the volatile dollar to a fixed weight of gold bullion.
If passed, the U.S. Treasury and the Federal Reserve will be given two years to publicly disclose all gold holdings and gold transactions. After that, the Federal Reserve’s dollar currency note will formally be re-pegged to a fixed weight of gold at its market price at that time.
This means, the Federal Reserve notes will become fully redeemable and exchangeable with gold at the new price. In such a scenario, the U.S. Treasury and its gold reserves will support the Federal Reserve banks as a guarantor.
The official document noted that the dollar has lost more than 40% of its purchasing power since 2000. Furthermore, it has shed 97% of its purchasing power since the introduction of the Federal Reserve Act in 1913.
In fact, as analyzed recently, the Dollar Index has been falling of late, further brining to light the weakness of the said currency. Given the current state of affairs, former U.S. President Donald Trump feels that the dollar will no longer be the world standard.
Bill to protect against Washington’s “irresponsible spending habits”
Commenting on the how the latest initiative would prove to be beneficial, Mooney said in a statement,
“A gold standard would protect against Washington’s irresponsible spending habits and the creation of money out of thin air.”
Furthermore, he added,
“Prices would be shaped by economics rather than the instincts of bureaucrats. No longer would American families, businesses, and the economy as a whole be at the mercy of the Federal Reserve and reckless Washington spenders.”
The bill has just been introduced now. For it to be enforced and become law, it will have to be green-lit by the House, Senate, and the President.