Richard Russell, who lived through the Great Depression, writes the following in the November 26 issue of his newsletter, “Dow Theory Letters” …
‘… if the government wants to inflate in a time of deflation, and the dollar’s viability is under attack, the government could back the dollar with gold. The government could unilaterally raise the price of the gold it owns to say $5000 an ounce. The government could then say the dollar is partly-backed by gold, every dollar is worth one five thousandth of an ounce of gold. In other words, if the dollar falls under suspicion, the US might find it expedient to return to a version of the gold standard.’
More on this topic
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(Gold Versus Paper, 3/13/10)
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(Gold Versus Paper, 3/9/10)
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Why the Gold Bubble Will Peak at $2,000 in 2010
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