The Wall Street Journal published my letter to the editor which disagrees with James Grant’s (“The Fed Could Use a Golden Rule”, op-ed, July 12) recommendation for the Federal Reserve to re-introduce a gold standard.
The U.S. began to recover from the Great Depression of the 1930s when President Franklin D. Roosevelt cut the dollar’s ties with gold, which allowed the government to issue more money to lower interest rates. Similarly, the current record-long, 10-year expansion following the Great Recession of 2007-09 was greatly facilitated by the accommodative monetary policy implemented by the Federal Reserve. No other country uses a gold standard. Gold today isn’t being used as currency, but instead it is an alternative asset class that is being used as a speculative store of value.
Prof. David I. Kass, Ph.D.
University of Maryland
College Park, Md.