Gold Standard?

Question

what are come positives and negatives about using the gold standard?

Answer 1

The phrase “gold standard” is defined as the use of gold as the standard value for the money of a country. If a country will redeem any of its money in gold it is said to be using the gold standard. The U.S. and many other Western countries adhered to the gold standard during the early 1900’s. Today, however, gold’s role in the worldwide monetary system is negligible. Britain abandoned the gold standard 1931; the USA abandoned it 1971. Holdings of gold are still retained because it is an internationally recognized commodity, which cannot be legislated upon or manipulated by interested countries. On August 15, 1971, the world entered the first era in its history in which no circulating paper anywhere was redeemable in gold, by anyone. At one point in time it was illegal for a U.S. citizen to own gold. President Richard Nixon of U.S. closed the “gold window.” This action broke the last tie between gold and circulating currency, resulting in our modern financial system which is called a “floating currency” system.


Since 1976 gold the U.S. government no longer sets the gold value of a dollar. The price of gold rises and falls in relation to the demand for the metal. Gold coins have not been minted as legal currency since 1933. In 1986 the U.S. Mint did begin to issue gold coins for collectors four denominations: $50, $20, $10, and $5. And there really is a Fort Knox! Since 1937 most of the nation’s gold has been stored there, underground.


Even though the world’s monetary systems are no longer based on the value of gold, people are still intrigued and impressed with it. It is a valuable metal with many high-tech uses, and a beautiful metal that still adorns the artifacts of kings.