Lewis E. Lehrman Testifies at Capitol Hill Hearing on Monetary Policy and Rising Prices

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Lewis E. Lehrman testified on Thursday, March 17, 2011 with Journalist James Grant and Prof. James Salerno before Chairman Ron Paul’s House subcommittee on domestic monetary policy to discuss the Federal Reserve, inflation, and solving international monetary issues with a modernized gold standard system.

Lewis E. Lehrman before Chairman Ron Paul's House subcommittee

A dollar convertible to gold would provide the necessary Federal Reserve discipline to secure the long term value of middle income savings, to backstop the drive for a balanced budget.

Lewis E. Lehrman has written widely about monetary economics which earned him an appointment by President Ronald Reagan to the Presidential Gold Commission in 1981. He also heads the Gold Standard Now, a project of The Lehrman Institute, a public policy foundation that he founded in 1972.

In Thursday's hearing, Institute founder and chairman Lewis E. Lehrman stated: “Since the expansive Federal Reserve program of Quantitative Easing began in late 2008, oil prices have almost tripled, gasoline prices have almost doubled. Basic world food prices, such as sugar, corn, soybean, and wheat, have almost doubled. Commodity and equity inflation, financed in part by the Fed’s flood of excess dollars going abroad, has profound effects on the emerging markets. But in many emerging countries, food and fuel make up 25-50% of disposable income. Families in these countries can go from subsistence to starvation during such a Fed-fueled commodity boom.”

     “Inequality of wealth and privilege in American society is intensified by the Fed-induced inflationary process. The subsidized banking and financial community, combined with an overvalued dollar -- underwritten by China -- have also submerged the manufacturing sector, dependent as it is on goods traded in a competitive world market. In a word, the government deficit and the Federal Reserve work hand in hand, perhaps unintentionally, to undermine the essential equity and comity necessary in a constitutional republic. Equal opportunity and the harmony of the American community cannot survive perennial inflation.”

Mr. Lehrman continued, “A dollar convertible to gold would provide the necessary Federal Reserve discipline to secure the long term value of middle income savings, to backstop the drive for a balanced budget. The gold standard would terminate the world dollar standard, by prohibiting official dollar reserves, and the special access of the government and the financial class to limitless cheap Fed and foreign credit. “

     “To accomplish this monetary reform, the U.S. can lead, first, by announcing future convertibility, on a date certain, of the U.S. dollar, the dollar itself to be defined in statute as a weight unit of gold, as the Constitution suggests; second, by convening a new Bretton Woods conference to establish mutual gold convertibility of the currencies of the major powers -- at a level which would not pressure nominal wages; third to prohibit by treaty the use of any currency but gold as official reserves.”

To read his full testimony please visit http://www.TheGoldStandardNow.org.

About The Lehrman Institute

The Lehrman Institute is dedicated to public policy, educational and historical research. It was founded in 1972 by Lewis E. Lehrman. The Lehrman Institute has sponsored a wide range of research and discussion in the fields of economics, historical research, foreign policy, and urban policy. http://www.TheGoldStandardNow.org is a news and commentary aggregator focused on domestic and international monetary policy issues

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