Lessons of the past

Re “Boom and bust: It’s the American way,” Opinion,

July 20

Jane Kamensky’s history of the first American banking collapse may be accurate, but she shows profound ignorance when she states that “we’re better off than the first generation of over-leveraged Americans. We have a strong central bank.” In fact, the Federal Reserve Bank is the problem, and for much the same reason that Andrew Dexter Jr.’s banks were the problem in 1809: There is no gold backing dollars printed since 1971, the year that the United States unilaterally went off the gold standard.

The dollar has fallen drastically in international purchasing power. Every dollar printed without gold backing to fund the U.S. trade deficit further depreciates the currency’s value and brings us closer to the ultimate catastrophe of hyperinflation. The lesson of Dexter’s bank failures has been forgotten. Think Zimbabwe can’t happen here?

John C. Diebel

Newport Beach