Vince Dhimos answered a question on Quora.
Q: WOULD PEGGING THE US DOLLAR TO THE PRICE OF GOLD LIMIT HOW MUCH CURRENCY THE FEDERAL RESERVE COULD PLACE IN CIRCULATION?
Vince Dhimos, Editor-in-Chief at New Silk Strategies (2016-present)
It doesn’t matter what policy is adopted, but forget gold. The US is ideologically wedded to paper, or rather to electronic dollars. The bottom line is that the government or Fed should stop adding to a now-unpayable and irresponsible debt and must stop simply printing money, ie, using a financial solution to solve an economic problem. But that will not happn in the biggest Western “democracy,” where politics — not common sense — drives all policies.
The real US economy is anchored in real production and there is not enough production to merit the wild reckless spending in Washington. (Trump focused on shale oil but that is systemically unprofitable).
In October, according to CNN:
“The Fed announced on Friday it will launch a new program next week that will gobble up $60 billion of Treasury bills per month. The purchases will further boost the size of its already-massive $4 trillion balance sheet.”
This means more money printing to solve a problem that was created by the US trade wars coupled with overspending.
The US is not minded to use economic measures to solve economic problems, and financial “solutions” are not real solutions, just can kicking. The president who promised in his campaign to cut back spending, actually raised the debt tremendously. No politicians has the will to cut spending and reduce the debt. This is a systemic characteristic of Western “democracy.”
Washington has fallen prey to a money-printing mentality akin to a drug addiction. There is no solution now. The downward spiral will continue until the economy flat-lines.
If you think that is an exaggeration, name a viable presidential candidate who would dare to suggest spending less on arms, closing military bases, stopping foreign aid to homicidal countries, making billionaires pay taxes and cutting spending programs starting in 2020.