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Can Trump Restore Honest Money?

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"History could remember Trump as it does William McKinley, taking power at the end of the Long Recession and inaugurating a period of peace and prosperity. If, however, Republicans govern poorly...history will remember Trump as we do Jimmy Carter; a footnote who was sadly unprepared for the job. Ultimately…it is foolish to predict what history’s judgment will be."  - Sean Trende, Real Clear Politics, 11.16.16 (1)

It may be foolish to predict ‘history’s judgment,’ yet that’s what most of us instinctively attempt to do.

The new Trump administration faces a daunting job of 'draining the swamp' and beginning the process of dismantling the Progressive policies that have brought America to the brink of both moral and financial ruin.

President Trump and his team will face at least six major challenges over the next four years; Entitlement reform, Healthcare reform, Immigration reform, Tax reform, Monetary reform and Regulatory reform. All of which are sorely needed to Make America Great Again.

If Trump succeeds in making the changes required, it will no doubt also cause uncertainty to rise - and if there is one thing financial markets hate, it's rising uncertainty.

Mr. Trump has begun talks with our trading partners to establish more attractive deals, but tariffs could easily send Wall Street into a tailspin. Yet trade deals need to happen. As I recently told Fox Business anchor Neil Cavuto, we face the possibility of an expanded US-China trade war if Trump follows through with threats to impose tariffs on Chinese products and curb currency manipulation.

Regarding monetary reform, Mr. Trump has regularly expressed his distrust of the Federal Reserve. Some have speculated the Janet Yellen may be replaced by Trump before her tenure is up in 2018. Trump has also vocalized his support of a Federal Reserve audit - something fiscal conservatives have been advocating for decades. If the Fed is audited, expect more financial market volatility on Wall Street. A Fed audit could also push gold prices up dramatically - especially if the Fed is found guilty of wrongdoing.

Speaking of gold, Donald Trump has also said he is open to considering putting our nation back on a Gold standard. He was quoted on WMUR TV as saying, "I like the Gold Standard and there is something very nice about it....We used to have a very solid country because it was based on a Gold Standard for it. We do not have that anymore." (2)

Mr. Trump is spot on regarding the 45-year failed experiment Nixon began by disconnecting our money system from a Gold Standard. In November 2015, Mr. Trump told GQ Magazine, "Bringing back the Gold Standard would be very hard to do, but boy, would it be wonderful. We'd have a standard on which to base our money.” (3) The last president to consider restoring a Gold Standard was Ronald Reagan.

Trump's economic adviser Dr. Judy Shelton, author of Fixing the Dollar Now: Why U.S. Money Lost Its Integrity and How We Can Restore It was asked about her views on returning to a Gold Standard. She told Forbes,"In terms of gold being involved [in the system], some people may think of it as a throwback, but I see it as a sophisticated, forward-looking approach because gold is neutral and it's universal." (4)

Dr. Sheldon went on to say, "It's a well-accepted monetary surrogate that transcends borders and time. If you look at the foreign reserves of the most important countries, they keep them mostly in gold".

Why a Gold Standard? Because honest trade requires a trustworthy standard. In ancient times merchants used a scale and weights to measure what was sold and paid. The Bible has many condemnations of those using crooked scales and dishonest weights as a way to steal from others.

In my latest book, MONEY, MORALITY & THE MACHINE co-author Lowell Ponte and I explain why a nation’s currency has consequences and how devalued money also devalues morals, causing a downward money-and-morality spiral which goes on debasing our money and its users.

Can Trump stop this downward economic spiral and restore monetary morality? Time will tell. Reestablishing an honest money system as well as surrounding himself with wise economic counselors, such as Dr. Judy Sheldon and John Paulson would be a good start.

Bottom line: Americans should enter the new Trump era hoping for the best, but also preparing for the worst. Gold is the world’s best form of wealth insurance – whether we face the best of times or the worst of times. In my opinion, the Trump presidency will be very positive for the price of gold.

Sources:

1. "The God that Failed" (Real Clear Politics)

2. "Conversation with the Candidate: Donald Trump" (WTAE Pittsburgh)

3. "Donald Trump Weighs in on Marijuana, Hillary Clinton, and Man Buns" (GQ)

4. "Trump and Gold" (ZeroHedge)

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