From my understanding, remove from the gold standard just allows government to arbitrarily make up the value of the now fiat currency, which is why we now struggle with inflation and soaring debt.
It seems obvious that you’d want your dollar to theoretically be fixed to another medium with a readily appraisable value simply to maintain stability and prevent government corruption through manipulation of the monetary supply.
But then again, I’m no economist.
In: Economics
There’s a few misunderstandings you’ve got there.
>which is why we now struggle with inflation and soaring debt.
You can still be on the gold standard and have rampant inflation. They can and did change what amount of gold the dollar was worth. When first enacted $1 was 1oz of gold. They changed it a lot, when we got off the gold standard 1oz of gold was worth $20.67. Meaning that roughly 2000% inflation had occurred during the time we were on the gold standard.
All a “standard” does is mean the government changes the exchange rate to that standard whenever more money is introduced. It’s just more work on the back end for quite frankly no tangible benefit. Maybe the inflation was a little more obvious since someone had to come out and say the government will now give you $5 instead of $4. So you can know that 25% more dollars are now in circulation since the last change.
The gold standard also has nothing at all to do with debt. That’s a completely unrelated thing.
Also, gold is not inflation proof. You can go dig up more.
Gold is also harder to know the value of because, is it pure gold? Is it 80% gold? Is it fools gold? The layman doesn’t know, you have to go get that professionally tested. Nobody has time for that.
>arbitrarily make up the value
We arbitrarily make up the value of gold too. Gold has very few practical uses. It’s valuable because we like it. If we didn’t like it, it would be worthless. How much someone likes gold will determine how valuable it is to them. There is no universal and objective value of gold.
>readily appraisable value
Again, this kind of goes against all ideas of trade and commerce. There is no one agreed upon value of anything. Everything has to be more valuable to some people and less valuable to others. Nothing can ever have an objective set value.
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