Gold is in fashion these days thanks to uncertainty in the global economy and worries that the United States and other countries will devalue their debts through inflation. Gold is valuable, and it almost always has been.
Ron Paul, the Congressman and presidential candidate, has even suggested that the United States return to the gold standard, which would require backing each dollar issued by the Treasury with a fixed amount of gold. That might stop the government from minting tons of cash, but what else would it do to America’s economic future?
Economist Daniel Altman points out that it would leave our monetary policy vulnerable to random external events like the discovery of rich, new gold mines. It would tie our hands and deny us the flexibility we need to navigate the rapidly changing markets of the 21st century.
Daniel Altman on why the Gold Standard isn’t such a good idea:
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