Congress Has a Stake in the Dollar s Integrity – WSJ

Speaking before the Atlantic Council in April, Ms. Yellen referenced the Bretton Woods proposals that Treasury officials began crafting in 1941. The goal then was to shape a postwar international financial architecture that would inspire struggling nations to persevere in hope of a more stable and prosperous economic future.

But even as Ms. Yellen cited the advantages of a rules-based multilateral system, she neglected to mention that the Bretton Woods system s defining feature was its requirement that participating nations maintain a fixed exchange rate between their own currencies and a dollar convertible into gold.

When central banks buy government debt to goose economic performance, they create inflation. To cure it they must undermine productive activity and hammer financial markets. Maybe it is time to consider whether we can do better. Stable money should be seen as a right. It s essentially a moral contract between government and its citizens. How else can people plan?

via www.wsj.com

Janice Shelton.