What was the benefits(intended or actual) in removing the gold standard from the U.S. dollar?
Also, what happened to all of that gold?
2006-09-27 13:42:46 · 4 answers · asked by mike 2 in Social Science ➔ Economics
The so-called benefit was that the Fed governement could inflate or devalue the dollar without constraints. Some would not call it a benefit. The confiscated gold was partially paid to central banks of other nations until Nixon closed the "gold window" in 1971, partially was sold on the open market, and some part of it is probably still in fort Knox.
2006-09-27 14:04:32 · answer #1 · answered by WoodyBretton 3 · 2⤊ 0⤋
The other responses above all made good points.
The "benefit" to individuals was to give them weaker money more prone to inflation & currency manipulation by the government.
Most of the gold has been sold. Some people believe that that's how the price of gold is currently as low as it is with the dollar as weak as it is. Usually the dollar weakens, oil & gold , other commodities go up. ANd the opposite also is true. Now the dollar is weak , oil is high, what's gold doing ? Dropping ? Some people say the gold market has had alot of the Fort Knox gold sold by the U.S. Gov't to keep the supply plentiful & the price lower so that as an indicator that it would be out of step for a while. (not showing up the weakness of the dollar)
Who knows for sure? Not me.
;-)
2006-09-27 15:47:17 · answer #2 · answered by WikiJo 6 · 1⤊ 0⤋
The gold has gone on the open market for sale. The removal of the gold standard happened when the economy was by far out reaching the gold on hand. Now the dollar is valued by the ability of the government to tax you. That way there can be an unlimited amount of bucks in circulation even though it isn't worth much any more.
2006-09-27 13:48:03 · answer #3 · answered by Anonymous · 2⤊ 1⤋
Do you REALLY think we got rid of the Gold? :)
http://www.usmint.gov/about_the_mint/fun_facts/index.cfm?flash=yes&printer=yes&printer=yes&printer=yes&printer=yes&printer=yes&printer=no&action=fun_facts13
http://en.wikipedia.org/wiki/Official_gold_reserves
http://en.wikipedia.org/wiki/United_States_Bullion_Depository
2006-09-27 13:45:55 · answer #4 · answered by Life after 45 6 · 2⤊ 0⤋