The proponents of gold or some other fixed monetary rule are more likely to be found in the Republican Party, and what they object to is the very idea of money creation by fiat, not just its distributional effect. Still, there’s some overlap.
Ted Cruz, in one of the early candidate debates last year, said the Fed “should get out of the business of trying to juice our economy and simply be focused on sound money and monetary stability, ideally tied to gold.”
‘Solid Country’
Then there was Donald Trump. “We used to have a very, very solid country because it was based on a gold standard,” he told WMUR television in New Hampshire in March last year. But he said it would be tough to bring it back because “we don’t have the gold. Other places have the gold.”
In more recent interviews, the presumptive nominee sounds like he’s drifted toward a soft-money worldview. Last week, he drew attention to the U.S. government’s ability to print money. To the gold bugs, that’s a problem -- but Trump painted it as a potential solution.
Below the presidential level, though, the gold camp and its allies have gained support.
“There’s a growing constituency within the House Republican membership that a more rules-based approach or a gold standard would be advantageous,” said Hurwitz of Barclays.
‘It Was Horrific’
Not all Republicans welcome the development.
The gold standard “was awful. It was horrific,” said Tony Fratto, a former Treasury and White House official in the George W. Bush administration. “It led to some of the worst economic downturns and bouts of deflation in history.”