We had a great podcast last night. We heavily discussed the Federal Reserve and it’s impact on inflation. We had a caller named Joe, who clearly understood the issue and gave some great opinions. We discussed how America could run its own monetary system. RC and Joe felt that a gold standard wasn’t necessary and that if we managed our money supply according to our population that things would be fine. They also agreed that the United States needed to get back to manufacturing and creating our own products and industry.
My argument to add was that we did need something to back up the currency for global trade. If we want to buy oil from Saudi Arabia or wine from France, we made need the notes backed up by a commodity of some sort. Joe felt that other countries would use the American dollars to purchase our goods and he was right.
If America used its products such as grain, gold, silver, cotton, and other commidities to back up it’s currency other nations would accept our dollars. That is the way the world works. If Saudi Arabia knew that they could trade their US Dollars for gold or grain, they would certainly accept US Dollars for oil.
The world doesn’t always work the way we want it too, but right now it’s a disaster. Inflation is out of control because the Federal Reserve has no control over our money.
Check out the rest of the podcast here