We’ve looked at a lot of Jim Rickards ads over the past couple of years, most of which either promise rapid-fire profits from currency options or predict huge gains for gold and, perhaps, a return to gold-backed money… today’s pitch is another one of the latter, it’s an ad for Rickards’ Strategic Intelligence.
The hook for this ad, since every ad needs some sort of attention-getting scandal or surprise, is a “shocking” 44-second video of then-candidate Ronald Reagan that has been “locked away” for decades — it is, in brief, an ad that Reagan cut during the lead-up to the 1980 New Hampshire primary that extolled the benefits of the gold standard.
The gold standard was, in some ways, an important part of the 1980 campaign and the political talk of the early 1980s — though really it wasn’t the gold standard that was the focus, it was the rampant inflation and the lost credibility of the Federal Reserve (both of which, of course, tie in heavily to monetary policy). Milton Friedman and Reagan’s other advisers convinced him to scrap the “gold standard” ad, though I’ve seen reports that it aired once or twice, and they also, once President Reagan was in office, talked him out of his gold-standard thinking — the commission that Reagan put to the task recommended against the gold standard and in favor of other controls on inflation.
That was 35 years ago, with the scrapping of the gold standard under Nixon still fresh in everyone’s mind and blamed for the inflation of the 1970s… but now, as you’ve probably noticed, the gold standard is seen as an ancient relic by most and is almost never discussed in political campaigns. Even Senator Rand Paul, son of famed libertarian Fed critic and former Representative Ron Paul, has only said that he’d like to see a “commission” to look at connecting the dollar to gold or some other commodity or hard asset, and his campaign fizzled out pretty quickly… perhaps because any commission that includes economists, like Reagan’s commission in 1981, would probably say “heck no” to the gold standard.
But anyway, here’s a bit from Rickards on that campaign ad video:
“In fact, for the last 36 years, this rare footage has remained ‘shelved’ to the world at large…
“Leaving millions of Americans in the dark about the true legacy of one of history’s most accomplished leaders…
“And the raw, wealth-creating power of what I consider the single most lucrative ‘secret gift’ a President has ever left to the American public.
“Now, as a former advisor to several Republican administrations—and a current economic advisor to the U.S. Government—I’m one of exactly THREE people in the world with access to this footage.
“But in the next few moments, all that’s about to change.
“Today, I’m going to show you Ronald Reagan’s ‘buried tape…’
“And tell you exactly how to claim YOUR share of his ‘secret gift’ to the American public.”
So… the “secret gift” is, of course, not a “gold standard.” And the only real secret to that video is that Reagan and his political team set it aside because they figured it wouldn’t work. Rickards portrays Reagan as someone who wanted to do the right thing in returning to a gold standard but was thwarted by his aides and advisors at every turn (including the well-covered interview with Bob Novak in 1986, when Reagan was asked about the gold standard and responded that “I still support the gold standard” but, after being told by his aide Don Regan not to get bogged down, “they just won’t let me have my way”).
And to make sure that conspiracy buffs have a home in Rickards’ newsletter, he also brings up the Reagan assassination plot — when Hinckley made his try at Reagan in 1981, wounding the new president, gold prices apparently dropped sharply… which to Rickards means that Reagan “mattered” to gold prices.
That was before Reagan’s Gold Commission met, with their mandate to consider a return to the gold standard, and during a time of extremely violent moves in the price of gold, so it’s awfully hard to pin causality on any one event. It was also a few months before the Fed Funds rate peaked at 20% during the continuing “lick inflation now” strategy under Volcker, and a year before the Gold Commission’s findings were reported (“The Commission concludes that, under present circumstances, restoring a gold standard does not appear to be a fruitful method for dealing with the continuing problem of inflation”). And, of course, the Soviet invasion of Afghanistan and the release of the hostages from Iran were in the mix and in the headlines as well… the world was not primarily focused on the gold standard, though Rickards says that he was at the time disappointed in Reagan for not winning that fight.
No major currency is backed by gold anymore, and my guess is that as long as the world is run by politicians who prefer to be unfettered in their spending and want to be able to influence exchange rates, probably no major currency will be backed by gold.
But that’s not really the point of Rickards’ ad — he used the assassination and the “secret video” to get our attention, but the real Reagan “secret gift” he notes was a regulatory change to make it easier to develop mines in the US. Here’s how he describes that:
“… on March 15, 1988…
“Nearly six years to the day after the Gold Commission pronounced the return of the gold standard ‘dead on arrival’…
“President Reagan sat down at the Resolute Desk…
“Rolled up his sleeves…
“And took the future of American gold into his own hands…Are you getting our free Daily Update
"reveal" emails? If not,
just click here...