The end of the article, written by Andy Sullivan, discusses reaction to Paul's advocacy for a return to a gold standard. Sullivan writes, "Economists note that Paul's long-standing proposal to return the dollar to a gold standard would force the United States to relinquish control of its currency."
To that I say what Roy Hobbs says to the Judge's concern that an untimely home run by Hobbs would decidedly harm the Judge's financial prospects. "That would be the beauty of it." When Sullivan refers to the United States, he means the government. That a true gold standard would force the state to relinquish control of its monetary system is indeed the greatest virtue of the gold standard. Thus, it should not be a cause of concern, but something to celebrate. Imagine an economic world in which there would be no more government facilitated monetary inflation, and therefore, no more central bank induced inflationary booms that result in economic recession and financial panic.
Incidentally, notice that Sullivan does not name which plurality of economists to whom he is referring. I am an economist and I do not fear the gold standard.
At the end of the article Sullivan quotes Morgan economist, Feroli:
"We would still have monetary policy - it would be set by gold miners in South Africa and Uzbekistan, rather than bureaucrats in Washington," said Michael Feroli, chief U.S. economist with JPMorgan Chase.
"If you like what OPEC means for oil prices, you'd love what the gold standard would do to financial markets."
That Feroli is worried that a gold standard would make us beholden to the governments of South Africa and Uzbekistan reveals that he does not understand the gold standard very well. His comparing monetary policy under the gold standard with OPEC, is particularly unfortunate.
While it is true that a lot of the world's newly mined gold is dug up in those countries, there is a tremendous difference between gold and oil. Oil is not very durable at all. Once it is used as an energy source it is gone and the only way to use oil again is to drill for more. Things are not the same with gold. One of the characteristics of gold that has made it likely to be used as a medium of exchange in free societies throughout history is its durability. The vast majority of gold every mined is still in existence. Consequently the notion that our monetary system would be held captive to gold mining countries is simply wrong.
If we had a 100% gold dollar, we would have the most stable monetary system possible. It would be one without monetary crises, inflationary boom/bust business cycles, and would instead allow us all to benefit from, most likely, gradually falling prices made possible by sustainable economic development. What is not to like?