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8 Apr 2013
Monetary easing in US revitalizes gold standard
FXstreet.com (Barcelona) - Amidst the recent new era of monetary easing and central banking action, a palpable distrust of many regional entities, including the Federal Reserve, have reinvigorated the age-old concerns facing paper currencies – notably when weighed to gold.
Indeed, the latent concern that U.S. dollars may become worthless are in fact fueling a push in more than a dozen US states to recognize gold and silver coins as legal tender.
Lawmakers in Arizona are poised to follow Utah, which authorized bullion for currency in 2011 – similar bills are advancing in Kansas, South Carolina and other states.
In the United States, the Tea Party-backed measures are mostly symbolic – you still can’t pay for groceries with gold in Utah. “They do reflect lingering dollar concerns however, amplified by the Fed’s unconventional moves in recent years to stabilize the economy”, noted Loren Gatch. “The legislation is about signaling discontent with monetary policy and about what Ben Bernanke is doing, there is a fear that the government, or Bernanke in particular and the Federal Reserve, is pursuing a policy that will lead to the collapse of the dollar. That’s what is behind it.”
Bernanke has pushed interest rates to near zero since the 18-month recession that began in December 2007. The Fed said in March it would continue buying $85 billion in securities each month in a program known as quantitative easing that has ballooned its assets beyond $3 trillion and is aimed at keeping long-term borrowing costs low to support economic growth.
Indeed, the latent concern that U.S. dollars may become worthless are in fact fueling a push in more than a dozen US states to recognize gold and silver coins as legal tender.
Lawmakers in Arizona are poised to follow Utah, which authorized bullion for currency in 2011 – similar bills are advancing in Kansas, South Carolina and other states.
In the United States, the Tea Party-backed measures are mostly symbolic – you still can’t pay for groceries with gold in Utah. “They do reflect lingering dollar concerns however, amplified by the Fed’s unconventional moves in recent years to stabilize the economy”, noted Loren Gatch. “The legislation is about signaling discontent with monetary policy and about what Ben Bernanke is doing, there is a fear that the government, or Bernanke in particular and the Federal Reserve, is pursuing a policy that will lead to the collapse of the dollar. That’s what is behind it.”
Bernanke has pushed interest rates to near zero since the 18-month recession that began in December 2007. The Fed said in March it would continue buying $85 billion in securities each month in a program known as quantitative easing that has ballooned its assets beyond $3 trillion and is aimed at keeping long-term borrowing costs low to support economic growth.