cato-journal-v34n2

Federal Reserve and the Dollarunder the true gold standard, the global economy, as a whole, mayeven attain balance-of-payments surplus—equal to the increase inofficial, monetary gold reserves—and thus attain once again themuch sought-after global rebalancing; in this case, vis-à-vis worldwidegold producers and dishoarding.ConclusionHistorical evidence has pronounced its judgment upon theFederal Reserve System—the institution into whose hands Congressentrusted the fiduciary responsibilities of a great nation’s monetarystandard, and of its monetary and banking institutions. Let it be said,however, that the men and women of the Federal Reserve Systemhave presided with good intentions. But those intentions beg theissue. No observation could illustrate more decisively the most fundamentalof American propositions: that ours is a nation of laws, notof men endowed with good intentions and unlimited discretion torule over us without our consent. American history reminds us thatthe solution to the problem of unrestrained central banking lies withthe unique power given to Congress under the Constitution (ArticleI, Section 8) to regulate the value of money and establish the monetarystandard, and thus to undertake monetary reform.I do not underestimate the level of statesmanship required toundertake monetary reform. But we must never forget that it is theconstitutional right—and duty—of Congress to ensure sound money.The many failures of central banking, the Fed’s increasing power andprivileges acquired during the recent financial crisis, and the detrimentaleffects of a pure fiat money regime need to be remedied. Wehave now experienced the defects of one century of American centralbanking—and the predatory consequences of almost one-halfcentury of American inconvertible paper money.Under these circumstances, surely we must give thanks for thestatesmanship of Rep. Kevin Brady (R–TX), chairman of the JointEconomic Committee, for sponsoring the Centennial MonetaryCommission Act of 2013, which aims to study the Federal ReserveSystem in order wisely to reform it.America has never yet failed to restore itself. At this centenary ofthe Federal Reserve Act, I must believe we do have it within our poorpowers to restore a monetary system worthy of a great people, a greatnation, and a peerless Constitution.431