Could Bringing Back the Gold Standard Help Save Our Nation’s Economy?

Gold bricks

The United States has a printing problem, and that problem is now beginning to cause ripple effects that touch every individual across the globe who deals in Dollars.

This isn’t a single person or party’s fault though, every president and Congress going back to Richard Nixon, who removed us from the gold standard, has played a role in increasing our reliance on fiat currency in order fund our entitlement state, the military industrial complex, and bailouts of banks who otherwise should have been allowed to fail.

During times such as these, you’ve probably heard people talking about Bitcoin and other cryptocurrencies as the alternative solutions to many of our monetary problems. You may have even seen some politicians talk about taking us back to the gold standard, especially as countries such as China and Russia are now exchanging gold for natural resources instead of doing so in Dollars.

So what is the gold standard? Why is it so heavily criticized and could it even help improve things if it were brought back today?

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Why Critics Hate the Gold Standard

Fiat money supporters such as progressive economist Paul Krugman have long said that the gold standard was more hassle than it was worth, meaning that ditching it when we did more than half a century ago left us off better longterm (despite the fact that everything shows we’re far, far worse off). While the gold standard has been romanticized for its perceived stability by libertarian economists and so-called “gold bugs” like Ron Paul and Peter Schiff, there are solid sounding arguments that appear to make it seem like an outdated and impractical monetary system.

For those who embracing fiat currency such as we have now, they claim that it offers numerous advantages, including flexibility in monetary policy, economic growth, and the ability to respond to the demands of a modern global economy.

One of the key drawbacks of the gold standard critics claim is its inflexibility in responding to economic fluctuations. The fixed supply of gold limits the government’s ability to print money during periods of recession or financial crisis. In contrast, fiat currency allows for greater flexibility, enabling central banks to adjust interest rates, implement quantitative easing, and employ other measures to stabilize the economy and mitigate the impact of economic downturns.

While the gold standard is often praised for its stability, fiat proponents claim that it is vulnerable to deflationary pressures.

Overall, critics claim that a gold-backed currency falls short in addressing the complexities and demands of the modern global economy.

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Why Was the Gold Standard So Resilient?

A close examination can easily show us why the gold standard offered several significant advantages compared to the fiat money system we now are constrained by, which includes stability, discipline, and protection against inflation, making a compelling case for its defense.

One of the primary advantages of the gold standard is its ability to provide stability to an economy. By tying the value of currency to a tangible asset like gold, the government is compelled to maintain fiscal discipline, as excessive money creation can lead to depletion of gold reserves. The gold standard acts as a check on inflation, preventing the erosion of purchasing power and preserving the value of savings, ultimately fostering long-term economic stability.

What many Republicans now are bringing up is one of gold’s major contrasts to fiat currency, which is susceptible to government intervention and manipulation. The gold standard acts as a safeguard against arbitrary monetary policy decisions, meaning each time politicians wanted to avoid raising taxes, they could just have the Federal Reserve print more money. Gold limits the ability of governments to engage in deficit spending and unchecked money creation, promoting responsible financial management. The gold standard places constraints on excessive government borrowing, preventing unsustainable debt levels and fostering a more prudent approach to fiscal policy.

As we enter a new world order brought about by the rise of organizations such as BRICS, gold may be the only defense the dollar has against being replaced as the world reserve currency. Under the gold standard, currencies are backed by a tangible and universally recognized asset. This provides confidence to both domestic and international investors, as the value of money is not solely dependent on government promises. The stability and credibility of a gold-backed currency make it an attractive medium for international trade, fostering trust and facilitating smoother transactions.

Despite the criticisms it has faced, the gold standard offers tangible benefits that should not be overlooked. Do you support returning to the gold standard? Let us know in the comments below and across social media.

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