In terms of pure numbers, what cost $1 in 1913 would cost $22.82 today. We have had a cumulative inflation rate of 2182 percent in nearly 100 years. The US currency was taken off the gold standard in 1933, and obviously this has not curbed inflation. Pegging our currency to a tangible source is one of many ways to protect it against inflation.
Currencies have been insidiously transformed in the last 100 years from a representation of real money, fully backed and exchangeable for Gold, to its present form, a Note that is nothing more than a promise of the American people to repay its debt in the future. Unfortunately there are only three ways to extinguish the debt, which is now greater than its GDP: bond holders accepting losses, deep and politically devastating spending cuts, devaluation of the Dollar (re:inflation) or a combination of the three. The most likely scenario is the debt will simply be inflated away resulting in a great loss in confidence in the Dollar as the World's reserve currency. Other nations are already advancing discussions for a new monetary system to replace the Dollar. A return to a currency backed by a tangible commodity seems the most logical means to gain worldwide acceptance in the Dollar's replacement. Central Banks, especially China are net buyers of Gold. This is perhaps the greatest sign that Gold backing is a good idea, but somethings that is already in the works.
Yes, I think it is a good idea. It could greatly help with the money issues the United States is having at the moment. If everybody hands over the gold they would just throw away and allow the Gold Standard system to work, it could.
Yes, I agree that the return to the Gold Standard is a good idea, because of the condition of the U.S. economy. I t may seem like an archaic idea, but it worked, back in the day. Plus, this is natural control, because paper money leads to inflation, which robs a little from everyone.
The state of the economy has made it very clear that the dollar is no longer the stable option it once was. The recession and the global financial crisis, to an extent, were effects of a badly regulated economic order and have shown the U.S. Government to be ineffectual. That being the case, the ubiquity and strength of the U.S. dollar is not just suspect, but worrying. The Gold Standard is a lot safer and dependable in the short term, and will prevail for generations and centuries to come.
Once upon a time, our money was backed by gold. Our coins were made with silver. The metal value of a silver quarter could still buy you almost $6 worth of goods today, which is about the same items many decades ago. Taking the country off of the gold standard allowed our government and the central bank to print as much fiat currency as they desire. That's why prices have been going up in this country, and what it really means is that our money is losing purchasing power. The only way to stabilize our money is by backing it with a hard asset, such as gold. Gold always has value, unlike paper money, which was once redeemable for it's equivalent in gold. People run to gold (and silver) in hard times because they understand that it is real money, and it always has been.
Gold has been around before the time of Christ and been the backbone of economies for thousands of years. Gold may fluctiate in value, but it will never hit zero like the fiat money can. Buying power can not be killed therefor a collapse in economy would not happen. The same goes for silver despite the buying power difference.
The current world financial situation, especially that of the United States of America, has been severely marred by the phenomenon of monetary inflation. Relying on paper currency with nothing to back it up (for instance, a precious metal) means that a government has control over how much money circulates and how much each bill is worth. Since there is a finite amount of gold in the world, money would have a fixed and understandable value under the gold standard.
The fiat money that this country has created is nothing more than just paper created by a shadow Federal Reserve owned and operated by a government that uses political favors to exist. We had many fewer problems when our money had real value associated with it. Gold is raising in price every day due to the fact that it is solid and can be used as real money. We are nothing more than slaves to other countries without this happening, and our debt will continue to grow, with bonds decreasing in value day in and day out.
The gold standard is the simple idea that every unit of currency is backed by a corresponding amount of gold. When this actually happens, over time money increases only in proportion with the amount of gold that is mined. Since gold is rare, expensive to uncover, and durable, this keeps the supply of money relatively constant. It also means that over time prices will tend to naturally fall, rather than the inflation to which we are accustomed. New technology makes the gold standard feasible in new and complex ways which can expand upon the traditional model and make it even more efficient.
The Gold standard stops the US mint from printing more money than it can back up. So if there's a high demand for money and the money supply can't keep up. There's less growth and higher inflation (as the cost of money has gone up). This is inflation, this is why we went off of it. TO CONTROL INFLATION.
Think about it. We have to be able to back up the dollar bill with Gold. Something whose price is set outside of monetary policy. If the price of Gold increases, the dollar appreciates. We can say goodbye to our growth in exports. In Economics class, it's usually good if the American economy has a relatively depreciated price than it's trading partner.
Why don't people think things through...
The problem with the economy is not the gold standard. Did you know they did debase the currency in history, when gold and silver were money. They ended up using only silver then they reduced the amount of silver in the coins. They did it in Roman times , they debase the coins in England. Hello! Americans used to have a dollar make of 90% silver. It is not the case anymore. Why? It`s called expediancy. People in charge in your country decide to do what they like even if it is bad for the economy.
The real cause of the economic mess we are in is because there is a minority who live by their own rules which are different from the rules put apon everybody else. Your jobs have been sent to Asia. Your wages have not folloed inflation. They replaced full time jobs by part time temporaty jobs. Most workers don`t have a pension found anymore . Your country is becoming a third world country before your own eyes. Can`t you see it?
They did not get the women out of the kitchen into the work place, to emansipate them. They did it to have more workers and to reduce wages and tax more people. It`s all about money, and pressing the human worker lemon for more juice for the buck. That`s the bottom line.
The economic changes that happened over decades and the changes they are imposing on you are to shape our society in a way you cannot beegin to immagine.
The gold standard is a distraction. It cannot fix anything. It is a matter of moral values. If a few opress the many, denying the workers sufficient living wages the society cannot work.
Money is a representation of your swet. You must preserve the value of the currency. If you devalue the currency you are rubbing the people. The devaluation of currency is like telling you that your work is worth nothing. You could buy a nice car for 10 thousand dollar years ago, now the sane car cost 20 thousand dollars. What happened? It means that if you did put 10 thousand dollars aside to buy that car you can no longer aford it because someone has devalued your money by making the decision that you have to pay more and more to buy the same things. In these conditions why would you save money that will be devalued so much. Today people who are luckey anough to have an ordinary pension plan do not make anough to retire. In many cases the employes paied their dues, but the employers did not contribute what they were suposed to. Some fouonds were totaly scraped.
No, it is not a question of precious metal as backup of the currency. This explanation is simplistic and inacurate. The big picture is called greed, and dishonesty, economic immorality.
I hope this brings a bit of light to the situation.
Returning to the Gold Standard is a bad idea. It is actually a good thing that the government can print money in depressed economic times because that means it has something it can do to stimulate the economy. There are retractionary things it can do in boom times to help revitalize the value of the dollar.
The Gold Standard used to work, but it became unpopular for a reason. We live in a world that is constantly changing, and we should not keep judging by old standards. New situations call for new interpretations and standards. What was considered a Gold Standard years ago might not be such a good thing today, in a different situation.
One cannot simply change the value of an industry. This would take away from an industry that is established. If you take away that, there will be angry producers and massive layoffs. If you compare potatoes to gold you would note that Americans use a lot of potatoes. From these potatoes, 16 trillion of them are owed to someone else and the farmers have to keep track of them. Changing the value of a potato won't keep any farmer happy.
We use a fiat currency because we NEED to be able to control the units of currency per population in a given region. An excess of liquid currency gives rise to inflation, a shortage deflation. We already know that population rises exponentially. We also know that wealth accumulates. Both of these factors will inevitably lead to shortages in the currency supply that cannot be remedied unless you have the ability to print more money. This is why the gold standard was abolished in most of the world. Its not a conspiracy.
If we return to a Gold Standard during a recession, the public will hoard gold in an effort to provide personal economic security. Hoarding gold will only falsely increase the value of gold. Returning to the Gold Standard is not a sound economic plan, due to lingering of the current recession.
The Gold Standard made sense when we were operating by use of gold as a currency. Paper money was just a convenience that was represented by gold. Now that notion is very outdated, and would most likely be impossible to re-establish. Our current monetary system is complex and unfortunately we have came a long way from a bar of gold being the value behind our money.
In a time of economic crisis, we should not be looking to future possibilities for our exchange rates and methods of currency, but rather we should use each and every day as implementing a step in the right direction for our economy. Right now, unemployment rates are beginning to go back down very slowly, but are still extremely high throughout the country. I feel that the Gold Standard is the LAST thing we should be worrying about and rather should invest some time in righting what as been done wrong within the world of economics, and fix the financial problems we have within our country first...like paying off the multi-gazillion dollar debt we have...
Countries like United States of America, China, Russia, England, Germany, Spain, French, etc would be able to obtain enough gold to to back the money they all ready have in circulation. Hence a # of them will fall. Also, a lot of country print money to help the economy and wouldnt be able to with a gold standard