Quote:
Originally Posted by holograph
in this day and age it doesn't make much sense going back to gold standard , even if it was possible, it would just repeat the history and we would end up back where we are today
|
If we were dumb enough to do that, gold would currently be $4206.53. But the price of gold is constantly changing, so governments have to fix a price to create currency stability. That's where the 2 problems come in. Like when Nixon went off the gold standard. it was Americans were spending tons of dollars in Europe and France was demanding gold for dollars. China would do that to us now. Other problems, where the US & UK had fixed rates, many counties like India, that really didn't back their currency and the Rupee was always being devalued. But India had a free market in gold. So gold was $150 an ounce in India while worth $35 an ounce in the US & UK. However the UK economy was so bad, they had to do devaluations due to having to pay France their gold.
Now when gold is $35 in the UK & US what happens? Smuggling. Watch the movie Goldfinger. That's what he was doing.