Lux Lucet

A gold standard is the creationism of economics. – Larry Summers

Former treasury secretary Larry Summers, it seems, is more right than he knows. The quote above, widely attributed to him on the internet, apparently was his reaction to a question about the viability of a monetary gold standard. Summers, as do nearly all academic economists, considers the gold standard to be the barbarous relic of a bygone era. “Let us mange the currency for you,” say the Keynesians, “we’re so much more reliable than that yellow metal.” In a way they’re right, of course. You can always count on the Keynesians to push monetary policies that result in the debasement of the dollar at your expense. When it comes to robbing people blind, they’re a reliable bunch indeed.

The funny this is, Summer’s statement is actually correct, just not in the way he means it.  By likening the gold standard to creationism, Summers is being sarcastic and intends us to understand he thinks it is worst sort of crack pottery. But just as creationism is God’s revealed truth about the origin of the world, so too does the gold standard reflect God’s revealed truth about money. Money, the Bible tells us, must be honest. That is to say money must be full-bodied. This is the point of the many verses in Scripture on honest weights and measures. When a currency such as the dollar is defined by a certain weight of gold and can be exchanged for it without discount, you have an honest, full-bodied currency. When governments can manufacture money without limit, without convertibility into a commodity such as gold or silver, you have the prescription for the worst sort of monetary abuse. This is the situation throughout the West today: governments robbing their people by debasing their currencies with the printing press.

Yes, Summers is right about the gold standard in a fashion similar to Caiaphas who stated that it was better for one man to die than for the whole nation to perish: he says more than he knows.  The moral blindness evidenced by Larry Summers in his attack on God’s revelation is further evidence of just how far the West has strayed from the Biblical blueprint for government that was established in the West as a result of the Reformation. The “wisdom” of man has supplanted the wisdom of God.  My financial advice to readers? Hold onto your wallets. Buy gold and silver.