Economic effects if gold became worthless?

Question

Say I developed an alchemist process to create gold for $5/ounce. What would then happen to national economies? Since the value of a nation's currency is ultimately backed up by gold, would currency then become worthless, plunging nations into extreme financial crisis?

Answer 1

Nations do not back their currency with gold.

It would cause a little havoc on the financial markets, but most people who use metals as a market hedge have a precious metals index fund that contains other metals besides gold.

Answer 2

.No currency is backed up by gold anymore. They're all backed up by a promise only. Scientists say that gold is no longer a precious metal due to the fact that it can never be used up, it never goes away and more is continuously being mined. Perhaps a thousand years from now, gold will present a disposal problem. So if gold became $5 an ounce, a lot of investors would lose their shirts. Few countries would topple

Answer 3

First of all, the value of national curerncies is NOT backed by gold in any way; that nonsense ended in 1973.

To answer your question, about the only things that would happen are a major drop in jewelry prices (which, if elasticity of demand for jewelry is right, might in turn lead to a rise in goldsmiths' wages) and a minor one in prices of electronic components. Gold mining industry would go bust, which would mean employment problems in some gold-mining regions and the end of water pollution problems in those regions.

Answer 4

i trust like we are nevertheless going to be the premiere (if no longer between the premiere) economies contained in the international thirty years from now. China and India are probable to capture as a lot as us, and there is a danger for Brazil to do a similar. i trust as if Europe and Russia are declining via declining populations and absence of elements. yet those all count number on wild playing cards at the same time with destiny politicians, catastrophes, advances in technologies, and wars. As we develop, international locations are starting up to compete extra economically them militaristically, and this may probable develop as time is going alongside. yet I do sense that human historic previous does have a minimum of one extra international conflict before a one international authorities is formed. Mankind is sure to type a one international authorities. this may probable take position by international relations, economics, and conceivable international conflict(s).

Answer 5

It would reduce the federal deficit, since the Feds could quit wasting money guarding large stacks of metal bars at Fort Knox (which do not serve any purpose, as far as I can tell).

Answer 6

People would buy silver. It won't matter. The world economy floats on the value of the exchange of goods and services.

Answer 7

Dirt would become extremely precious.

Politicians would be honest.

Women would stop fantasizing about me.

Answer 8

everybody is super rich that no one is paying attention to the
gold bars anymore.