Opinion: Which Judy Shelton will the Fed get? Gold standard advocate or Trump defender?
“The Wall Street Journal editorial board has encouraged Trump to think of Shelton as a chair-in-waiting. But Bloomberg News reports that Shelton ‘would,’ if confirmed [as a governor], represent a potential chair-in-waiting. One administration official familiar with the matter told Bloomberg in July that’s an option once Powell’s term expires, or even before.”
USAGOLD note: This article mentions Nobel laureate Robert Mundell (Columbia University) – often referred to as the ” intellectual godfather of the euro” – as her mentor. Mundell to my recollection never advocated the gold standard per se, but instead, the use of gold as a reserve asset marked to market on central bank balance sheets. There is a distinct difference between the two approaches. The mark-to-market regime allows the central bank to use gold as a hedge against currency depreciation, but does not obligate it to stay within the confines of a fixed gold standard. The gold standard, on the other hand, values the currency as a specified, fixed weight of gold and this seems to be what Judy Shelton has advocated in the past. It would be interesting to ask her about this distinction and see where she stands now. Up until I read this article, I was not aware that she viewed Mundell as her mentor.