The US leaving the gold standard has been alluded to the cause of inflation, (printing of too much money) and the de dollarisation (shift from dollar to other currencies in international trade.
Indeed what are the pros and cons of return to gold standard. (some of the rapid progress we had was due to leaving gold standard) There is a leak somewhere in the system as banks create money due to lending and the fractional reserve system)
- old retains a value that has been recognized across the globe throughout history, and a gold standard self-regulates to match the supply of money to the need for it.
- A gold standard would reduce the risk of economic crises and recessions, while increasing income levels and decreasing unemployment rates.
- A gold standard puts limits on government power by restricting the ability to print money at will and increase the national debt.
- Returning to a gold standard would reduce the US trade deficit.
- A gold standard would force the United States to reduce its military and defense spending and could prevent unnecessary wars.
- Many politicians, businessmen, and organizations support the return to a gold standard.
CON
- The availability and value of gold fluctuates and does not provide the price stability necessary for a healthy economy.
- A gold standard would limit the ability of the Federal Reserve to help the economy out of recessions and depressions, and to address unemployment.
- Gold standards create periodic deflations and economic contractions that destabilize the economy.
- A gold standard would increase the environmental and cultural harms created by gold mining.
- Returning to a gold standard could harm national security by restricting the country’s ability to finance national defense.
- Many prominent economists oppose returning to a gold standard.
