Money Meltdown

February 28, 1994
In the author's masterful treatment, monetary theories come alive. Starting with an overview of the work of John Maynard Keynes and Harry Dexter White, Shelton ( The Coming Soviet Crash ) examines the pivotal gold-based Bretton Woods agreement of 1944, which created a stable international monetary system. President Lyndon Johnson's inability to wage war abroad without properly financing it at home, she maintains, eroded Bretton Woods. Deficits and inflation became commonplace, undermining the dollar in international trade. By the late 1980s, monetary disorder, ``rampant throughout the world,'' had become the norm. Shelton's solution: a gold standard operated by the government. She claims it would be ``a tremendous contribution'' not ``just to free but also fair trade.'' Although she minimizes downside risks associated with this undertaking, her sterling prose and provocative observations should engender debate among central bankers and politicians.