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Bye-Bye Bernanke? The Case for the Gold Standard

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The dollar has rallied in recent weeks as the sovereign debt crisis spreads through Europe. But the greenback's strength may wane if the U.S. Federal Reserve keeps rates near zero — what it calls "exceptionally low" rates — until at least mid-2013 as currently planned. (See: Borrowers Win, Savers Lose as Fed Stay Pat — Again)

At the GOP presidential debate Wednesday night in Michigan, a handful of Republican presidential candidates took the opportunity to blast Fed Chairman Ben Bernanke for exactly the aforementioned easy money policies. (See: Beyond 'Oops': Perry's Gaffe Wasn't the Only Debate Mistake, Former Reagan Aide Says)

Former House Speaker Newt Gingrich repeated his call to fire Bernanke "as soon as possible" and echoed Rep. Ron Paul's repeated cries to audit the institution. Paul himself reverberated his crusade to check the Fed's books. And then Herman Cain, a former Fed Board Member, jumped on the bandwagon in a post-debate interview with Fox's Gretta Van Susteren.

"Yes, I would fire Ben Bernanke — I would also audit the Federal Reserve because there has been some bookkeeping going on that I don't think that the public totally knows about in terms of where did all of the TARP money go, who got bailed out, et cetera," Cain said. "Back in the '90s, when I was on the board of the Federal Reserve, we didn't have to deal with a $14 trillion debt — we had a much smaller debt to deal with — so we didn't try and basically tweak this economy with monetary policy and control unemployment as well as price stability."

Such anti-Fed sentiment seems to be spreading and becoming mainstream. According to a recent Rasmussen Reports poll, only 34% of people actually favor the Fed today.

Jeffrey Bell, a former Reagan adviser, is among those critical of the current U.S monetary system. He has been vocal about abolishing the Fed for decades and in support of the gold standard. Today he is pushing presidential candidates to support a return to a gold-based system. (Note: In the 2012 election Bell, has not and will not back any one candidate.)

Surprisingly, going back to the gold standard is an idea many people seem to favor. In a separate poll, Rasmussen found that 44% of voters favor a return to a gold-backed dollar, while 28% oppose it.

A return to a gold-backed monetary system would help stem the current economic crisis, which is primarily debt related, says Bell who is also the policy director at the American Principles Project.

"The source of the problem we have been having since late 2007 hasn't been addressed -- it is a monetary and banking problem and the banking system is still flat on its back," he tells The Daily Ticker's Aaron Task in the accompanying interview. "The elites say that it is not realistic to return to gold. [But] it isn't realistic to address a burgeoning debt problem with addition debt" as some contend. (See: Larry Summers: Debt Got Us Into This Mess and Debt Will Get Us Out)

In Bell's estimation, it would take three or four years for the markets to adjust to gold-dollar parity. To him, waiting for a few years to make the dollar "as good as gold" is better than the current "wheels are coming off" situation we are in today.

Tell us what you think: Do you support a return to the gold standard?