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How do you return to a gold standard?
What would be the mechanics of going back on the gold standard? Would the new dollar be worth one to one with the current bill, or would there be a conversion factor?
I don't need arguments for or against such a move, just trying to understand what would happen to cash in pocket, in banks, and the value of prices and wages.
I guess I really need those who advocate it explain how it would work. Personally, I don't see how you could have two different currencies at the same time. Technically, you do have enough gold, but the value in current dollars per gram or even milligram would be enormous.
I cannot find anything on the net that explains just what steps would have to be taken.
5 Answers
- TeeknoLv 79 years agoFavorite Answer
Well, it would cause a complete world-wide financial meltdown, making the economic troubles of the last few years seem pale in comparison.
The money in your pocket would be worthless. Your savings would be worthless. Your credit would be worthless.
The only people who really want to go back on the gold standard are people who own a lot of gold. Duh.
- 5 years ago
Gold does fluctuate a lot. Now, I don't have charts, but in the last 5 years, per ounce it has gone from around 1800-1100. If the dollar was moving like that it may be a little too much.
At the same time.. the setup and actually use of it right now isn't the same as it would be either. It is kind of interested. I have quite a few coins and it does amaze me that a $5 indian coin from the early 1900's I'm holding was $5 at the time. Even with the relative value being different to what $5 is today. It still amazes me.
- 9 years ago
Most people that advocate for the gold stander such as Ron Paul just want to legalize the ability to use gold as money and have the ability to introduce a gold or silver backed currency.
- 9 years ago
The truth is, there isn't enough gold to back a currency that would support a modern economy as large as ours. The dollar would be worth a lot less, because the gold backing it would be spread incredibly thin.
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