GOP platform will call for 'considering' a return to the gold standard

This year's Republican party platform will include a proposal to "consider the feasibility" of a return to the gold standard, the Financial Timesreported Thursday.

According to The Wall Street Journal, early drafts of the platform, set to be adopted during the party's national convention next week in Florida, include a call for the creation of a commission to "consider the feasibility" of such a move to "set a fixed value" for the American dollar. These drafts also include a call for the auditing of the Federal Reserve.

The decision to advocate for a return of the gold standard is a throwback to party platform items in 1980 and 1984. In 1981, then-President Ronald Reagan created a commission to "to consider the feasibility of a metallic basis for U.S. currency," but ultimately advised against it.

The co-chair of the party's platform committee, Rep. Martha Blackburn (R-TN), said this year's recommendations were not included to appease Rep. Ron Paul (R-TX), a longtime advocate of a return to the gold standard who amassed enough delegates during the Republican primaries to be considered a possible source of party dischord.

Earlier this year, Paul got into an exchange with Federal Reserve Chairman Ben Bernanke during a congressional hearing, telling Bernanke, "Some people still think [gold] is money."

However, a spokesperson for a mining industry group, the World Gold Council,told Bloomberg News said such a move would be unlikely because the annual output growth of the metal “may not necessarily match the appropriate growth in the monetary base,” meaning there wouldn't be enough of a supply. He also cited the lack of an international consensus on the issue as an obstacle.

Last week, the council released a report saying demand for gold had fallen to its lowest level in two years, due to a decline in buying from China and India, two traditionally heavy markets.

In a lecture earlier this year, Bernanke said such a dearth of available gold would make a return to the gold standard a waste of resources.

"To have a gold standard, you have to go to South Africa or someplace and dig up tons of gold and move it to New York and put it in the basement of the Federal Reserve Bank of New York and that's a lot of effort and work," he said.

[h/t Lawyers, Guns and Money]

[image via Agence France-Presse]