mike asked in Social ScienceEconomics · 1 month ago

 Why is a return to the gold standard a bad idea?

4 Answers

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  • Oiy
    Lv 5
    1 month ago

    The world has a very limited supply of gold. The distribution among countries is even worse. So it has to pop up the gold price to catch up with the demand for money. The situation is likely to be like the hyperinflation in the 1920s.

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  • 1 month ago

    Mainly because we don't have enough gold to cover all the money. Secondly the money that we now possess is -60 cents! If we were to convert to the gold standard your money would be absolutely worthless we are in so much debt that are dollar bill is actually a piece of paper that says you owe $0.60. on top of the value of the currency. We can't convert to the gold standards our money has no value whatsoever.

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  • Zirp
    Lv 7
    1 month ago

    Because in capitalism, money trickles up to those who have no need to spend it. Without constantly creating new money, the economy would keep shrinking.

    Whether leaving money-creation to commercial banks who demand back every penny with interest is the smartest way to organise this is another matter

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  • Mark
    Lv 7
    1 month ago

    It's not.  In fact, basing one currency on another currency is far worse.  That's sort of like taking out a second mortgage and paying it back with a credit card!

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