If you didn’t catch the article in Saturday’s Wall Street Journal “The Myths and Facts About the Gold Standard” and the intermingling of politics and economics interests you then you might want to. The Gold Standard is a monetary policy that basis the value of currency a country issues on the value of gold that it holds in its reserve. The United States stores its Gold reserves with 4,578 metric tons near Fort Knox Kentucky and another 7,000 metric tons at the Federal Reserve Bank of New York. Some of that is held for other countries and banks. Gold hasn’t been the only standard for backing currency, as silver too played a role. Richard Nixon de-linked gold and US currency in 1971, following decades of national and international economic pressure.
Some believe that linking currency and metals would restore our country’s economics. There have been many books written about this subject, and it has been a topic for debate on the radio and in Christian circles since the 1980’s. Would going back to linking currency to metals solve all of our economic problems, would it be the decisive answer as some profess? I’ve listened to some of the rhetoric however I’ve never bought into it, perhaps because it seems too simplistic, or their arguments claim or indicate some kind of conspiracy. Maybe economics and monetary policy needs a dosage of simplicity, since complexity seemed to help fuel the Great Recession. When it comes to finances sometimes ‘wisdom of the ages’ can teach us some things and provide some economic solutions, perhaps a hybrid approach:
“While many people believe the United States should adopt a gold standard to guard against inflation or deflation, and stabilize the economy, there are several reasons why this reform would not work. However, there is a modern adaptation of the gold standard that could achieve a stable price level and avoid the many disruptions brought upon the economy by monetary instability.” read more at the above link