Krug..Er..Rand?

David Frum looks at Rand Paul, and along the way makes a great argument as to why both Paul's (Rand and his father, Ron) obsession with the "gold standard" and ending the Fed will have exactly the opposite effect they want:

Ron Paul’s big idea is to end the Federal Reserve’s discretionary authority over the U.S. money supply, just as Greece, by joining the European Union, ended the discretionary authority of the central bank of Greece. Paul calls his idea a gold standard, but its economic effect would be exactly the same as that of the euro upon Greece: The local central bank would lose the power to create money, which would be created elsewhere—by the European Central Bank in the case of Greece, by the gold miners of Russia, South Africa, Australia, and Canada in the case of Ron Paul’s United States.

The benefit of such a system is that it prevents the local monetary authorities from deliberately fomenting inflation. The detriment is that it prevents the local monetary authorities from mitigating recessions and depressions. That’s why the U.S. abandoned gold in 1933–34, and why Greece is desperately looking for aid from its European partners today. Most people in most places have decided that the detriments of externally fixed currencies exceed the benefits.

Do we really want the value of the dollar set by the whims of a market (precious metals) that we have no control over and is rife with speculation (see Hunt brothers...), especially when so much of that commodity rests in the hands those hostile to us (Russia, South Africa), and unreliable allies (Canada) - who can control the value of that commodity.