Testimony for the Subcommittee on Domestic Monetary Policy and Technology, on “Sound Money: Parallel Currencies and the Roadmap to Monetary Freedom, Thursday, August 2, 2012.
The gold standard alone is what the nineteenth-century freedom- loving leaders (who championed representative government, civil liberties, and prosperity for all) called “sound money.” The eminence and usefulness of the gold standard consists in the fact that it makes the supply of money depend on the profitability of mining gold, and thus checks large-scale inflationary ventures on the part of governments.
– Ludwig von Mises
To discuss a possible roadmap to monetary freedom in the United States requires us to first determine what may be viewed as a “sound” or “unsound” money. Through most of the first 150 years of U.S. history, “sound money” was considered to be one based on a commodity standard, most frequently either gold or silver. In contrast, the history of paper, or fiat, monies was seen as an account of abuse, mismanagement and financial disaster, and thus “unsound” money.
Read the full report (PDF).