I had read it was abolished in 1971, but I also read it was in 1933. Which one is it? Also, why was it abolished in the first place?
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It was originally abolished in 1933, but then replaced by the Bretton Woods system wich claimed to be a gold standard but actually wasn’t one. It was a pinky promise to exchange Dollars for gold, but the US never had enough gold to actually go through with that promise when someone tried it with a larger amount (wich happened in 1971 when france called that promise in and blew up the entire bluff)
The gold standard was abolished because having it chokes your economy. Not being able to adjust the amount of money in circulation is severely limiting to investment, because if the economy grows but the amount of money doesn’t then money becomes more valuable simply from sitting around. And then why open a factory and take risks when you can just put your money in a sock as investment. A slight inflation is considered beneficial because it encourages people to use their money instead of letting it sit around.
The only way to increase the amount of money in a true gold standard system is buying more gold, wich is very expensive for the government and puts you at the mercy of gold exporting countries.
The reason why a gold standard was established in the first place was the fear that trust in paper money wasn’t enough to keep it valuable. Turns out it is enough, as long you’re careful about how much you print
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