{"id":68421,"date":"2024-05-28T10:02:35","date_gmt":"2024-05-28T15:02:35","guid":{"rendered":"https:\/\/olduvai.ca\/?p=68421"},"modified":"2024-05-28T10:02:35","modified_gmt":"2024-05-28T15:02:35","slug":"would-returning-to-the-gold-standard-resolve-our-most-pressing-monetary-problems","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=68421","title":{"rendered":"Would Returning to the Gold Standard Resolve Our Most Pressing Monetary Problems?"},"content":{"rendered":"

Would Returning to the Gold Standard Resolve Our Most Pressing Monetary Problems?<\/a><\/h3>\n
We all know the problem with fiat currency: the temptation to print more currency is irresistible, but ultimately destructive.<\/i><\/p>\n

Money in all its forms attracts quasi-religious beliefs and convictions.<\/b>\u00a0This makes it difficult to discuss with anything resembling objectivity. But given the centrality of money (and its sibling, greed) in human affairs, let’s press on and ask: would returning to the Gold Standard (i.e. gold as money \/ gold-backed currency) resolve our most pressing monetary problems?<\/p>\n

The conviction that the answer is “yes” is widespread.<\/b>\u00a0In this view, President Nixon “closing the gold window,” in 1971, i.e. ending the convertibility of the US dollar to gold in international foreign exchange (FX) markets, is\u00a0the Original Sin<\/b>\u00a0that doomed us to the inflationary Hell of fiat currency, i.e. currency unbacked by anything tangible such as gold or silver.<\/p>\n

In this view, the only way to avoid the consequences of this Original Sin–the eventual reduction of fiat currency to zero value via hyper-inflation as the currency is “printed” without restraint–is to return to the gold standard.<\/p>\n

So far, so good, but from here on in it gets tricky.<\/b>\u00a0We have a long history of precious metals being the only form of money in various economies, and an almost as long history of paper money augmenting precious-metal “real money” (in China, for example) and the issuance of copper coinage to grease small transactions.<\/p>\n

Gold-backed currency<\/i>\u00a0rolls off the tongue rather easily, but what exactly does this mean?<\/b>\u00a0In theory, it means every unit of paper \/ digital currency in circulation can be converted on demand to a physical quantity of gold or silver at an exchange rate either set by the nation-state’s government or by the market.<\/p>\n<\/div>\n

…click on the above link to read the rest of the article…<\/div>\n","protected":false},"excerpt":{"rendered":"

Would Returning to the Gold Standard Resolve Our Most Pressing Monetary Problems? We all know the problem with fiat currency: the temptation to print more currency is irresistible, but ultimately destructive. Money in all its forms attracts quasi-religious beliefs and convictions.\u00a0This makes it difficult to discuss with anything resembling objectivity. But given the centrality of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[309,374,1183,413,536,538,647],"class_list":["post-68421","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fiat-currency","tag-gold","tag-gold-standard","tag-hyperinflation","tag-money","tag-money-printing","tag-precious-metals"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/68421","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=68421"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/68421\/revisions"}],"predecessor-version":[{"id":68422,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/68421\/revisions\/68422"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=68421"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=68421"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=68421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}