Benn Steil: Adopt a gold-backed dollar? This is what happened the last time we tried

Section:

By Benn Steil
MarketWatch.com, New York
Thursday, August 11, 2016

"The dollar and gold are synonymous," Harry Dexter White, the architect of the Bretton Woods international monetary system, told Congress in 1945. "There is no likelihood that ... the United States will, at any time, be faced with the difficulty of buying and selling gold at a fixed price freely."

Under the Bretton Woods system, currencies were tied to the U.S. dollar at a fixed rate, and the dollar was in turn tied to gold GCZ6, -0.04% at $35 an ounce. Today there is much nostalgia about Bretton Woods -- a belief that the quarter-century from 1946 to Aug. 15, 1971 (when the system collapsed) was a golden era of monetary stability. But the reality was very different.

... Dispatch continues below ...



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Gold Standard Intersects 126.2 Meters of 3.95gpt Gold
At North Dark Star Oxide Deposit in Nevada's Carlin Trend

Company Announcement
Tuesday, August 9, 2016

VANCOUVER, British Columbia, Canada -- Gold Standard Ventures Corp. (TSXV: GSV; NYSE MKT:GSV) today announced assay results from the first three step-out core holes at the recently discovered North Dark Star oxide gold deposit on its fully owned and controlled Railroad-Pinion Project in Nevada's Carlin Trend. The results significantly increase the size of the North Dark Star deposit while also enhancing its prospective grade and establishing the orientation of a favorable trend supporting the potential for further expansion of the higher-grade zone.

The primary objective of this year's drill program at North Dark Star was to find a continuation of the high-grade zone discovered in core hole DS15-13 (15.4 meters of 1.85 grams of gold per tonne and 97 meters of 1.61 grams per tonne) at the end of last year's drill program. Hole DS16-08 located 100 meters south of DS15-13 returned multiple, significant, oxidized intercepts containing gold values above the cutoff grade established in the Dark Star NI43-101 resource estimate announced on March 3, 2015. Hole DS16-08 returned a 126.2-meter section grading 3.95 grams per tonne including higher-grade intervals of 44 meters of 4.70 grames per tonne, 17.9 meters of 5.6 grams per tonne, and 7.9 meters of 10.7 grames per tonne.

To see section maps and the drill plan:

http://goldstandardv.com/lp/north-dark-star-drill-results

... For the complete announcement:

http://goldstandardv.com/gold-standard-intersects-126-2m-of-3-95-g-aut-a...



Although the International Monetary Fund was inaugurated in 1946, the first nine European countries to meet the requirements of its Article VIII -- that their currencies be freely convertible into dollars at a fixed rate -- didn't do so until 1961. And by then, the system was already coming under enormous strain, as the U.S. -- contrary to White's assurances -- was losing gold reserves.

The fundamental problem was that the United States couldn't simultaneously keep the world adequately supplied with dollars and sustain the large gold reserves required by its gold-convertibility commitment. The logic was laid bare by economist Robert Triffin in his now-famous 1960 congressional testimony. There were, he explained, "absurdities associated with the use of national currencies as international reserves." It constituted a "'built-in destabilizer' in the world monetary system." The European dollar-convertibility pledges, far from representing the final critical step into a new monetary era, "merely return[ed] the world to the unorganized and nationalistic gold exchange standard of the late 1920s." ...

... For the remainder of the commentary:

http://www.marketwatch.com/story/bring-back-the-gold-standard-this-is-wh...

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