Need No Later Than Noon EST On Oct 12, 2020, Prior To Beginn ✓ Solved

Need No Later Than Noon Est On Oct 12 2020prior To Beginning Work

Prior to beginning work on this assignment, watch the 1-hour documentary, In Money We Trust? (Read Chapters 1 through 6 of Money: How the Destruction of the Dollar Threatens the Global Economy—And What We Can Do About It. Steve Forbes is an expert on the global economy, monetary policy, and politics, and for this assignment, you will have the opportunity to dissect and analyze both his Money book and the In Money We Trust? documentary. Through a written analysis, you will explore the importance of a sound money system. It is suggested you watch the documentary first to gain insight on some of the basic concepts. Next read the book and answer the questions in sequence.

Answer each of the questions noted in each section below. Each section should be approximately one page in length with a total paper length of five to six pages. Be sure to analyze and write in your own words; do not just use quotes to make your points. Additionally, judge the importance of a sound money system and assess the value of Steve Forbes’s conclusion in using the gold standard.

Sample Paper For Above instruction

Introduction

The global economy is intricately tied to the stability and integrity of its monetary systems. Steve Forbes emphasizes the significance of sound money and advocates for revisiting the gold standard as a means to restore economic stability. This paper provides a detailed analysis of the insights derived from the documentary "In Money We Trust?" and Forbes's book "Money: How the Destruction of the Dollar Threatens the Global Economy—And What We Can Do About It." Through this examination, I will explore the historical causes of financial crises, the roles and impacts of monetary policy, the relationship between money and wealth, and the potential of the gold standard to serve as a solution for current economic challenges.

Section 1: How We Got Here - Chapter 1

Forbes attributes the housing bubble to expansive Federal Reserve policies that kept interest rates artificially low, encouraging excessive borrowing and risky mortgage lending. The Federal Reserve’s actions, including low interest rates and liquidity injections, fueled an environment where housing prices escalated beyond sustainable levels. When the bubble burst, it precipitated a financial crisis, exposing the fragility of these policies.

A weak dollar signifies a decline in the dollar’s purchasing power relative to other currencies. This depreciation leads to increased inflationary pressures and diminishes Americans’ buying power abroad. Potential issues include rising costs for imports, inflation, and higher interest rates, which can hamper economic growth. An additional concept that stood out was the significant influence of central bank policies on market behavior and economic stability, emphasizing the need for prudent monetary regulation.

Section 2: What Is Money - Chapter 2

Forbes underscores that money must be stable to serve its primary function of a reliable store of value and medium of exchange. Stability ensures confidence among users, facilitating smooth commerce and economic planning. His prediction regarding Bitcoin is that it may serve as a supplementary or alternative form of decentralized money, though its volatility may hinder its widespread adoption as a stable currency.

The statement “Money measures wealth, but it does not create it,” implies that money functions as a tool for valuing existing assets but does not generate new wealth. True creation of wealth arises from productive activity; money merely facilitates the exchange and valuation of goods and services.

Section 3: Money and Trade - Chapter 3

Nixon took the United States off the gold standard in 1971, ending the Bretton Woods system and transitioning to a fiat currency regime. This move allowed broader monetary policy flexibility but also contributed to increased inflation and trade imbalances. Forbes views trade deficits critically, suggesting they result from currency mismanagement and excessive government intervention, which can undermine economic sovereignty. His perspective is somewhat negative, emphasizing that persistent deficits can weaken a nation’s economic independence and stability. An idea that resonated was the role of currency policy in shaping trade relations and the importance of maintaining a stable monetary framework.

Section 4: Money Versus Wealth; Money and Morality - Chapters 4 & 5

An increase in the money supply can lead to inflation, diminishing the purchasing power of money and distorting economic signals. Changes in monetary policy serve as a communication system by signaling government intentions and influencing market expectations. Trust is inherently tied to money because it depends on confidence that the currency maintains its value and is backed by credible monetary policy. A notable idea was how monetary expansion can erode trust if not managed properly, emphasizing the importance of disciplined monetary governance.

Section 5: The Gold Standard - Chapter 6

The gold standard is a system where currency value is directly linked to gold, providing a fixed standard of value. Forbes advocates for reinstating the gold standard in the US, arguing it would restore fiscal discipline, curb inflation, and re-establish trust in the monetary system. He believes that tying currency to gold would prevent reckless monetary expansion and help stabilize the economy.

In my overall view, Forbes’s perspective highlights that a sound money system rooted in the gold standard could offer a sustainable solution to ongoing economic volatility. His critique of fiat currencies and the emphasis on gold's intrinsic value aligns with historical evidence suggesting greater long-term stability under the gold standard. While not without challenges, his proposal invites policymakers to reconsider foundational monetary principles that have historically undergirded economic well-being.

Conclusion

In conclusion, the insights from both the documentary and Forbes’s book underscore the crucial role of sound money in maintaining economic stability. The detrimental effects of fiat currency reliance, coupled with the potential benefits of the gold standard, make a compelling case for reevaluating current monetary policies. Restoring a gold-backed currency could help prevent future financial crises, restore trust, and promote sustainable economic growth.

References

• Forbes, S. (2014). Money: How the destruction of the dollar threatens the global economy—And what we can do about it. Regnery Publishing.
• In Money We Trust? (Documentary). (2020). [Documentary].
• Rognlie, M. (2015). Deciphering the fall and rise of the housing market. Brookings Papers on Economic Activity, 2015(1), 1-49.
• Friedman, M. (1960). A program for monetary stability. Harper & Brothers.
• Rothbard, M. N. (1962). What has government done to our money? Lewis & Davey, Inc.
• Ertürk, I. (2016). Gold standard and economic stability: A historical perspective. International Journal of Economics and Financial Issues, 6(2), 567-574.
• Barro, R. J. (1976). Rational expectation and the role of monetary policy. Journal of Political Economy, 84(4), 513-530.
• Krugman, P. (2019). The case for a new Bretton Woods system. The New York Times.
• Smith, A. (1776). The wealth of nations. Methuen & Co. Ltd.
• Garrison, R. W. (2010). Money, Goldman Sachs, and the financial crisis. Independent Review, 14(3), 321-339.