eli5 What was the Gold Standard?
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It is what makes money have value.
In the old days, if the country (US in this case) had 100.000.000 in gold, it would only print 100.000.000 in dolar bills.Every bill in circulation was backed by something of real value. (Gold in this case.)
However, this standard was abandoned and it allowed to print more money.
If there are “aid packages” created by a government, it is often just freshly printed money that previously didn’t exist.It might seems nice to get free money, however, in the long run, this makes the currency less valuable (i.e. inflation) as nothing real of value is behind it.
Offcourse, other countries do this too, so relatively with them it is not that relevant.
Just be aware, some countries, such a Switzerland, do the opposite and still have 90% of their currency backed up by something of real value, which ensures their currency stays strong and even now, with all that is going on in the world, they see relatively minor inflation compared to other countries.
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