Forget the gold standard people, central banks are never going to go for that. However a UK professor has unwittingly identified a metallic standard a central banker can live with - from this BBC article on why humans have always tended to choose gold as currency:
"Take iron. In theory it looks quite a good prospect for currency. It is attractive and polishes up to a lovely sheen. The problem is rust: unless you keep it completely dry it is liable to corrode away. 'A self-debasing currency is clearly not a good idea,' says [professor] Sella."
Not a good idea? Hasn't he heard of inflation targets - debasement is the stated policy of central banks. So forget this talk of a Gold Standard, an Iron Standard is what we need.
One great advantage of an Iron Standard is that everyone has some rusted piece of metal lying around, so it would be a form of QE/monetisation for the common people. Everyone will be instantly wealthy, that has got to get everyone's animal spirits going and turn the economy around. Every country also has iron, so it should get worldwide support. China's got a lot of it, just knock down those empty apartments.
It will also market well with the public - iron is "strong" - and I'm sure Obama's political advisers will see the spin/MOPE benefits of the following announcement:
"An indispensable element in building a new prosperity is closely related to creating new jobs. We must protect the position of the American dollar as a pillar of monetary stability around the world.
Accordingly, I have directed the Treasury Secretary to sell all of America's gold reserves, which is a soft, ductile and wimpy metal, and institute convertibility of the dollar into strong Iron, in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.
Now, what is this action — which is very technical — what does it mean for you?
Let me say that this new Iron Standard will make all Americans, who buy American-made products in America, wealthier and your dollar will be worth just as much tomorrow as it is today. The effect of this action, in other words, will be to strongize the dollar."
To sex it up a bit, politicians might also want to consider Izabella Kaminska's idea of central banks issuing their own digital crypto currencies. Iron is heavy to carry around, so do away with physical coins and notes and issue BitIron instead.
Finally, an Iron Standard will encourage a lot of recycling, which is a Good Thing. It will also probably result in people scrapping perfectly good goods to monetise the iron in them - economists will love that as it is similar to Keynes' idea of filling old bottles with banknotes, burying them, and having people digging them up.
There is one potential problem with an Iron Standard, being that iron's debasement rate, or rustment rate, is constant and thus out of control of the central bankers. However I think an Iron Standard is a fair compromise between the hard money advocates and meddling central bankers who think they alone know what the one right interest/inflation rate is for a massively dynamic and complex economy. Come on guys, compromise. Central bankers - give up your omniscient delusions and omnipotency. Hard Money - give up your rigid money stock, a little rustment will discourage hoarding and encourage people to spend spend spend, and what could be wrong with that?