What is a dollar?

What is a dollar anyway? Who would know? Better yet, who should know?

Well, for starters I would think that the Fed Chairman should know, right? Think again. From the Wall Street Journal:
"Ron Paul to Bernanke: ‘Define the Dollar’"
http://blogs.wsj.com/washwire/2011/03/02/ron-paul-to-bernanke-define-the-dollar/

"Despite his various criticisms, however, Mr. Paul had one question for Mr. Bernanke: 'What is your definition of the dollar?'

"The Fed chairman, who has spent significant time on the receiving end of congressional scorn over the last few years, didn’t blink, framing his answer in terms of everyday consumers.

"'It’s the buying power of the dollar which is what is important,' Mr. Bernanke said, noting that 'consumers don’t want to buy gold; they want to buy food and clothes and gasoline.'"

Notice that Bernanke NEVER ANSWERED THE QUESTION. Does he not know? Or if he does, why wouldn't he say?


So what should the dollar be? Perhaps a claim on real assets (such as gold) the way it once was? No one believes that anymore. Or do they? From Zero Hedge:
"Stunner: Gold Standard Fully Supported By... Alan Greenspan!?"
http://www.zerohedge.com/article/stunner-gold-standard-fully-supported-alan-greenspan

According to Greenspan, "We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard.'"

The article continues, "And a further stunner: Greenspan himself wonders if we really need a central bank. Now our only question: why couldn't the maestro speak as clearly and coherently during his tenure which resulted in our current near-terminal financial state. And as a reminder, courtesy of Dylan Grice, if and when we do get a return to a gold standard there would be a need to reindex the monetary base to a real time equivalent price of gold, putting the price of the precious metal at about $6,300: 'The US owns nearly 263m troy ounces of gold (the world's biggest holder) while the Fed's monetary base is $1.7 trillion. So the price of gold at which the US dollars would be fully gold-backed is currently around $6,300.'"

Wow.

Remember, however, that although Greenspan talks a good game now, and did before he was Fed Chairman, he never backed up his words with action when he was in a position to do something about this. He never said stuff like this when he actually was in a position of power to change our monetary system. He may be right now but he is a gutless coward, in my opinion.