Should the United States Return to a Gold Standard?

Should the United States Return to a Gold Standard?

           Hello guys, my name Zhonghan Chang and I am going to talk about gold standard today. Does anyone know the gold standard? I remember Donald trump mentioned that he wants the united state go back the gold standard when he was presidential candidate.

         The gold standard was the olden system when the country’s currency was being valued directly to the value of gold. In that case, a country used the gold could convert its paper money to a fixed quantity of gold, whose price was fixed. This was the system that operated in the US prior to the 1971 ended by president Nixon . After that, the dollar became the fiat currency which was backed by the government’s full faith and credit.  In my opinion, I support that the US should return to the gold system as it was a credible and reliable system of exchange. This presentation will justify why the US should return to the gold standard system.

         One of the supporting evidences of this stance is that gold still retains the value that has been recognized throughout history in all parts of the world. Therefore, gold has real value due to its usefulness and beauty that makes it highly valued.. This is unlike the fiat printed paper money that has no real value. Instead, its real value is maintained by the government’s full faith and credit

         The gold standard would lower the high inflation rates and eventually slow the rise in prices of consumer prices. From a historical perspective, the US has experienced its lowest inflation rates under the gold standard system. Today, the fiat paper money system makes the US face high levels of inflation that can be easily addressed through the gold standard. The current fiat money system seems to be inherently undemocratic as it empowers the Federal Reserve which is an unelected central banking system to regulate the market. This is where the Federal Reserve plays as a regulatory body in the market rather than allowing the market forces to regulate themselves as they would under the gold standard. Moreover, the fiat money allows the government to spend without raising taxes and this ultimately shields them from being accountable and secretly imposes the hidden tax of inflation.

        A return to the gold standard would also place restrictions on the federal government’s ability to increase the national debt. This is because the fait money system used by the US government enables the government to raise money through issuing of treasury bonds. This can easily be bought by the Federal Reserve using the newly printed money leading to increased money in the economy that may result to inflation. Moreover, the gold system would ensure that the government is accountable for all the gold it uses in its transactions due to the knowledge that its depletion can be detrimental to the running of the government. In fact, the national debt has significantly increased as a result of the government borrowing and has doubled the figure since leaving the gold standard in the early 1971.