An age-old idea — the gold standard — is attracting new fans, amid growing investor concern that enormous government borrowing is weakening the dollar and spark hyper-inflation.
The day of realization is coming, James Grant, editor Grant's Interest Rate Observer told CNBC Thursday. "What can be said for the gold standard is that it is time tested. It has monetary properties. It worked imperfectly but consistently for a 100 years until it was interrupted," said Grant
The old standard, which fell out of use by the 1930s, was conceived to control money supply growth (and thus inflation and asset bubbles) by requiring currencies be backed by physical gold.
The concept has gained new currency in the wake of the 2008 financial crisis wherein governments and central banks tried to stimulate economic growth through extraordinary fiscal and monetary stimuli.