Returning to the gold standard would have prevented our current and previous economic crises, says Steve Forbes, Editor and Chief of Forbes Media. “History’s lesson is clear, even though people who should know better don’t want to face up to it: A nation always performs better when on a gold standard. That and low tax rates are fundamental for long-term prosperity. Always,” he wrote Tuesday. JPMorgan Chase CEO Jamie Dimon calls the stress in the banking sector “recessionary,” while market analysts predict more pain ahead. “It looks pretty clear that we are going to see parts of the economy break and we are heading for a recession… We forget that there’s also a banking crisis going on, so there’s going to be some pain… We are going to see some tough times and are probably going to see this play out in markets,” said Edward Moya, a senior market analyst for the Americas at OANDA Corporation.
Gold: The Forbidden Cure
Bringing up the subject of a gold standard is strictly verboten in the economics profession and among financial policymakers. It’s long past time to break this taboo. A gold-based monetary system would have prevented our present woes, not to mention this century’s previous economic and banking disasters.
Talk about cancel culture! For years the gold standard, under which the United States successfully operated from the time of George Washington to the early 1970s, has been the great unmentionable in government and academic circles, where even discussion of the topic is derisively dismissed.
Inflation never occurs with a gold standard. Under one we’d have been spared the calamity of the 2008-09 financial crisis, the subsequent unprecedented suppression of interest rates and the binge of money printing before and during the pandemic, all of which have led to the mess we are in today.
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Fox Business/Megan Henney
Jamie Dimon warns banking crisis has raised odds of recession
The banking crisis has increased the threat of a U.S. recession this year, according to JPMorgan Chase CEO Jamie Dimon.
That’s because the turmoil that has engulfed the financial system following the stunning collapse of Silicon Valley Bank (SVB) and Signature Bank in March has raised the prospect of drastically more restrictive lending standards in coming months.
“We are seeing people reduce lending a little bit, cut back a little bit and pull back a little bit,” Dimon said during an interview with CNN. Although stress within the sector will not necessarily force a recession, he said “it is recessionary.”
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MarketWatch/Vivien Lou Chen
‘We are going to see parts of the economy break’: Recession fears move back to the forefront of markets
Investors are reconsidering the risk that the U.S. economy could be about to tip into a recession, following fresh evidence that the red-hot labor market is finally loosening up.
On Wednesday, data showed the private sector added a fewer-than-expected 145,000 jobs in March. This came a day after the Labor Department announced job openings fell to a 21-month low of 9.9 million for February, down from a revised 10.6 million for the prior month. The pair of reports had investors flocking to the safety of Treasurys, and reignited recession fears that left gold prices near record highs.
The economic data also dented the appeal of stocks, sending the S&P 500 index and Nasdaq Composite to lower finishes on Wednesday. Traders now see an almost-certain chance that the Federal Reserve’s main interest rate target will fall by year-end from where it is now — between 4.75% and 5%; they think there’s a decent likelihood that policy makers will pause next month and in June before cutting rates in July.
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