Entry Submitted by MenoReno at 3:59 PM EDT on July 11, 2019
I don't think many Dinarians understand why returning to the gold standard is a bad idea. So, let me take another crack at explaining why we back our currencies by the strength of our economy and not some commodity like gold, silver, or oil.
I've previously talked about how Nixon stopped the backing of our currency by gold (and silver). Because we are the major reserve currency in the world, almost every country has US dollars in their banking system so that they can trade with other countries.
If we went back to the hold standard, then all those countries could exchange their US currency for gold from the UST. As there is about $1.8t of our currency floating around out there, our 8300mt would be depleted in short order and we would be forced to find another valuable commodity to replace it.
As if that weren't bad enough, a further problem would be inflation. Since the nineties, inflation has been well under control due to FED policies. However, in times of economic distress, people tend to hoard gold which increases its price. This, in turn would tend to lead to increased inflation, as charts going back to the early 1900s clearly shows.
Additionally, as the economy grows, we issue more currency to accommodate increased activity. If we were on the gold standard, this would not be possible because of its finite availability. In turn, this would lead to economic stagnation instead of growth.
I think we can all agree that we don't want to see that happen. For a fuller explanation, go to motleyfool.com.
MenoReno
______________________________________________________
If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we'll forward your request to the author.
______________________________________________________
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © 2019 Dinar Chronicles
I don't think many Dinarians understand why returning to the gold standard is a bad idea. So, let me take another crack at explaining why we back our currencies by the strength of our economy and not some commodity like gold, silver, or oil.
I've previously talked about how Nixon stopped the backing of our currency by gold (and silver). Because we are the major reserve currency in the world, almost every country has US dollars in their banking system so that they can trade with other countries.
If we went back to the hold standard, then all those countries could exchange their US currency for gold from the UST. As there is about $1.8t of our currency floating around out there, our 8300mt would be depleted in short order and we would be forced to find another valuable commodity to replace it.
As if that weren't bad enough, a further problem would be inflation. Since the nineties, inflation has been well under control due to FED policies. However, in times of economic distress, people tend to hoard gold which increases its price. This, in turn would tend to lead to increased inflation, as charts going back to the early 1900s clearly shows.
Additionally, as the economy grows, we issue more currency to accommodate increased activity. If we were on the gold standard, this would not be possible because of its finite availability. In turn, this would lead to economic stagnation instead of growth.
I think we can all agree that we don't want to see that happen. For a fuller explanation, go to motleyfool.com.
MenoReno
______________________________________________________
If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we'll forward your request to the author.
______________________________________________________
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © 2019 Dinar Chronicles
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