The Rebirth of the Gold Standard

What is the gold standard? The gold standard is an ancient monetary system in which paper currencies like the United States Dollar were backed by physical gold that was stored in government depositories such as Fort Knox. During the Great Depression the United States Dollar was so weak that the government had no choice but to enact the gold standard in order to strengthen the value of our paper currency. In 1933, the gold standard was officially put in place and until 1971 the US Dollar thrived because it was backed by physical gold that held true value. The US Dollar became the World Reserve Currency because no other paper currency could match its value and global popularity.

Unfortunately, in 1971, President Nixon removed the gold standard in order to be able to print unlimited amounts of money. Over the past 40 years this has resulted in dangerous inflation which has nearly consumed the spending power of our US Dollar. Have you seen the prices of food and gasoline increase noticeably during the past few years? If not then take your head out of the sand. These price increases are a direct result of inflation growing uncontrollably because our dollar is no longer backed by gold. But that’s not all…things are about to get a lot worse.

The United States Dollar is losing significant amounts of spending power every year. Since 2007, inflation has grown at an even more dangerous pace after the massive multi-billion dollar stimulus and quantitative easing measures which pumped extreme amounts of devalued paper into our economy. Ask any economist or market analyst, when there is too much paper currency flooding an economy, high inflation becomes a serious problem. What many Americans don’t know is that we are about to face inflation unlike anything the world has ever seen. The prices of goods and services could double and even triple or quadruple in the next few years, for starters. The only way out is with the rebirth of the gold standard.

If the United States Government reenacted the gold standard, our economy could slowly but surely emerge from the current financial crisis as a stronger nation with a stronger currency. If a gold standard is not enacted quickly, our dollar will continue to lose considerable value. This will set in action a chain of events that will force major global governments like China and Japan to stop buying US debt and treasuries. This would likely cause an absolute economic collapse which will make the first Great Depression look like a flourishing period for our nation. Let’s hope for the rebirth of the gold standard, but until then, let’s enact a gold standard of our own by investing in as much physical gold and as little US Dollars as possible.