What if the DOLLAR Was Still Pegged to GOLD | Gold Standard | ENDEVR Explains
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- Опубликовано: 8 июн 2024
- What if the DOLLAR Was Still Pegged to the GOLD | Gold Standard | Fiat Money | Business Explainer Video
Every once in a while, the gold standard goes back into fashion. The world has moved on from currencies attached to the precious metal for 50 years, but discussions around the topic are more vivid than ever. To understand why going back to the gold standard is still appealing to some people we need to dive into what are the disadvantages and advantages of the system.
00:00 Intro
00:56 What if we still had the Gold Standard
04:49 Research results - What if we had the Gold Standard between 2000 and 2020
08:43 Chapter 2 - The Bretton Woods System
If you are interested in this video, you might also like to watch about fiat money, gold logistics and cryptocurrencies. Here:
• Gold, Money and Crypto...
Sources:
1: www.econ.iastate.edu/node/707
2: Debt: www.cbo.gov/system/files/2021...
GDP: www.bea.gov/news/2021/gross-d...
Gold reserves: fiscal.treasury.gov/reports-s....
3: fred.stlouisfed.org/series/GF...
4:gold-standard.procon.org/
5:www.nytimes.com/roomfordebate...
6:gold-standard.procon.org/
7: www.nber.org/system/files/wor...
8: www.economist.com/finance-and...
9: investingnews.com/daily/resou...
10: www.forbes.com/sites/nathanle...
11: qz.com/1646318/why-trump-and-...
www.bloomberg.com/news/articl...
12: qz.com/1646318/why-trump-and-...
13: www.nytimes.com/2020/11/17/bu...
thehill.com/policy/finance/53...
14: www.wsj.com/articles/SB908404...
15: www2.econ.iastate.edu/classes/...
16:
www.thebalance.com/what-is-th...
www2.econ.iastate.edu/classes/...
17: www.thebalance.com/what-is-th...
18: www.nytimes.com/1933/04/06/ar...
19: www.usmint.gov/about/mint-tou...
20: www.nytimes.com/2013/03/03/bu...
21: 2001-2009.state.gov/r/pa/ho/t....
22: www.nytimes.com/2013/03/03/bu...
www.nytimes.com/2014/07/25/op...
23: www.nber.org/system/files/cha...
24: www.thebalance.com/what-is-th...
25: qz.com/1646318/why-trump-and-...
history.state.gov/milestones/...
26: history.state.gov/milestones/...
27: qz.com/1646318/why-trump-and-...
www.cvce.eu/content/publicati...
28: history.state.gov/milestones/...
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Gold standard is the way to go. Corruption is rampant from this system
Thank you
there is a reason the gold standard collapsed if you have ever bothered to read economics
@@eduwino151 naive
@@jeririce4928 modern economics does not work the way you think it works buddy
The gold standard and gold in general has worked for thousands of years. Gold wasnt the issue, it is undiciplined and greedy bankers and politicians who cause the problems by issuing more notes than gold to back them in order to spend beyond their means. Fiat currencies have always failed eventually and there is no reason to think that this will be any different from the dollar.
I don’t agree with the author when he argues against gold standard. The flexibility of the monetary system you are talking about is just printing money out of thin air. Gold outlived all currency and will outlive worthless dollars as well
logical fallacies. You made two of them.
But...... What happens if one country or a few countries decides to hoard all the Gold?
@@CRAIGC55 Lol no sane country would do that unless they want to destabilise their own economy as well as their international trading relationships with others.
Gold is only "valuable" because people mutually decided they liked shiny things. It's worthless fiat just like dollars, except when people decide to agree on its value. If people decided to agree on a fiat currency's value, it wouldn't be any different than the gold. It's all just human manipulation no matter what a system uses.
@@CRAIGC55 or if they decide to stop using gold to make their currency easier to manipulate, so they can out-compete countries that are restricted by the expensive gold standard? That's at least part of why western countries had to drop the gold standard in the first place.
I’m still an advocate of the gold standard despite the drawbacks. We can’t keep our government accountable or get their spending under control.
They will either tax you. Or they will tax you though inflation instead. Your choice. In the end you don't have control over your money.
@@willhaney96 Not necessarily. Gold standards has been proven to be stable since the Roman times.
@@AKumar528 except for for when when the African dude dumped the value of gold by tipping
If the government needed money on the gold standard they could just raise the price of gold then they can print more money
"spending" is only half of the problem, failing to make the uber rich and corporations pay their fare share.
A gold standard makes much more sense simply because there is a limited supply above ground and the growth in supply is relatively stable. It also works with the laws of supply of demand… if there is a large supply of wheat then you need less gold to buy the same amount of wheat than if there is a shortage. If there is a shortage than the amount of gold needed to buy wheat goes up and this encourages people to get into the wheat industry and produce more. The free market is self regulatory in this way and you cant have a free market when government has the power to expand and contract the currency supply as it wills.
A gold standard also assures the purchasing power of the currency stays stable. If you save 5 oz of gold then you hold a stable proportion of the total gold in circulation therefore purchasing power is maintained. Compare this with holding $10,000 of fiat currency as savings. If the govt decides to print $1 billion more fiat currency then your savings represent a smaller proportion of the total currency supply and in this way purchacing power is stolen from the saver of that currency.
💥👏🤘🤟👍✌️😁💨
But...... What happens if one country or a few countries decides to hoard all the Gold?
I'm starting to see fiat money akin to crypto in some sort of weird way. You can create more of it if the 'head' people feel like it or decrease it. And it's people's faith in it that makes it really grow and gives it any value.
Who determines the value of the gold? Even if you save in terms of gold, the Govt can always decide to obtain more gold, then your savings % of gold would go down. The Govt can always impose laws limiting the amount of gold you can have.
Very interesting but it would be better if it was narrated by a real person
This robot voice sucks
Honestly I like ENDEVR but y'all should use a real narrator.
@@rxtriad1099 right. Don't know if everyone would like my voice but it ain't bad and I'd do it fairly cheap
absolutely I agree..
@@Kremithefrog1 i can't even finish the vid
A gold standard with guidelines holding countries to some sort of auditing system would force them to stay fiscally responsible.. not to mention greatly reduce a countries ability to wage war!
The fiscal responsibility and therefore stability is the biggest argument indeed. But some think different. Thanks for watching 😀
@@ENDEVRDocs oh the perils of Democratic elections.
Like Bitcoin or something like it
Not as a actual currency but being used to peg the dollar
Could you imagine if we could track that omg y’all about game changing, you can hide and try and manipulate the blockchain but it’s always gonna pop up Eventually
0:23 the dollar is a fiat currency NOT fiat money... money is a store of value (SOV)... currency loses value consistently, like the dollar...
Yes indeed
Currency is just receipt of money. Money has intrinsic value but currency don't.
Mike Maloney style
So all the economic uncertainty is largely caused by the government… yet if the dollar was pegged to gold over the last few decades the government would largely have had different policies. The 2008 economic recession was largely the result of government policy changes on financial institutions. If the dollar was attached the gold the government would not have made this policy change. Also only single-analysis study mentioned is an anti gold study… pretty weak.
glad someone sad it. a computer voice praising the feds moves over the last decade was ridiculous
Gold standard was and will be the best standard for those nations whom wants to strengthen their currency Vs world other currencies..
Rgs....Thanks
I don't remember the fed helping me personally... so why do they get to decide the value of my money? why don't we get to decide who's in the fed?
If we want back to Gold Standard you could probably buy a brand new iPhone for just $10-$20 as limited amount of currency would allow the Market to bid down prices of products. Key word "market." ...Of course Government would butt in and screw everything up.
$10 is about $525 of gold so your right
That would work so long as the people were not in large amounts of debt when we switched to a new system. All debt would have to be forgiven. My grandpa in the 1950's saved up 5k and bought a house on a 160 acres when he was in his 20's. He started saving at 12 years old. How long would it take now for a 12 year old to save up enough money to buy a house on a 160 acres? That's pretty crazy when you think about it.
If we went back to the Gold Standard, your wages would also have been very low. So the $20 iPhone would not have been considered "cheap" at that time, but rather very expensive.
If the Federal Reserve had performed its job, there's a good chance that the stock market crash of 1929 would have been avoided. Unfortunately, bad government programs just get more funding.
Lmfao because money the problem … they never stop to think that their bad policies are the problem
or don't interfere at all...
People love FDR and thought he helped the country with the new deal
The stock market crash occurred because millions of people had purchased and buoyed up stocks on margin. That is, ordinary, financially illiterate people (clerks, laborers, factory workers etc.) entered (played) the stock market by buying equities at pennies on the dollar. This artificially inflated the values of those stocks. The house of cards couldn't go on forever.
The solution is easy:make all world coins with gold, silver,metal...etc, this means the money coins present real value. And countries does not have to have gold to manifestate their economy status. Hope for reactions.
In that way they can’t finish their agenda
That's why Moammar Kaddafi Saddam Housein where killed and the shah of Iran was toppeled and don't beleive all that rubbish about democracy liberty exetera exetera they say all the time
hahahaha
Good Idea. Kick out the Bankster!
Make a 1 oz gold eagle with $10,000 face value
@@blackghost1734 With inflation and the debt at 32 trillion as of May 2023...now you would have to make an Eagle=1 million dollars.
inflation is already high and going to be higher in the next year.
I guess you mean inflation, right? We have more videos about that too. Click on the playlist in the description to find out more. And thanks for watching 😀
@@ENDEVRDocs yea auto type messed up, yes I have been keeping my eye on how this all plays out in years to come.. cuz I see some states raising the price on drinks and smoke and food at a corner store overnight.. inflation is getting real. at least the poor and middle class will be paying the price.
It does work wonders when you back that paper with the threat of bombs
underrated comment
the automated voice for some reason makes it difficult to follow all the way.
As long as oil exists money printing will never stop. Time to creatively destroy the petrodollar system
EROI of oil fell to 10. It's barely enough for our current infrastructure and we don't have any new source of energy with EROI high enough to keep economies growing. So we will have stable decline in coming decades. Governments are not worried about climate change because of fossil fuels, they create incentives for green energy to find excuses on economy decline caused by end of cheap oil. World oil production peaked in 2007, that's why we had prices of oil skyrocketed and they caused 2008 crisis. Then we had some hopes on shale oil, but it's EROI is too low and it didn't change overall picture. The more we extract the harder it is to get another barrel and that increases oil prices, which in turn slows down economy. So even if we go green we will not see economic growth because we don't have cheap energy.
@@IgorFlysta extra terrestrial cheap energy is on its way
@@banksofbarcelona3893 Bull. Even if energy was free, those distributing it would charge current prices and raise them periodically just because.
@@Rhiorrha The type of energy coming will go directly to power a device. No distributors needed
What escalate this mess now is mostly corruption and speculation. I believe via using gold standard,its harder for corruption and speculation to rise as most transaction will be backed by real gold.no gold,no trade.
the US didn't want to lose power that's why they removed the gold standard, they called countries that rightfully wanted to redeem their currencies for gold "speculators"
Returning to the gold standard is an excellent ideal for several reasons. First among these is the fact that the real value of products and services can be reestablished based on their actual worth minus inflation. Think of it as the air out of the bag and returning sanity and stability to prices. Second, it returns the value of your money to you the owner and not to policies by governments that can artificially make it more, or less valuable on a whim. Third, it controls impulse spending by nations who will have to live within their means. Things like war for example become too expensive to support or fight over prolonged periods of time because you can only spend what you have and can obtain on credit and nothing more. In other words, it controls the human passion for destruction.
A key point is things like inflation can be easily brought under control by the fact that gold is rare. As such, its value is very stable. Any addition to the world supply of gold that could affect its value is marginal.
Rather than a gold standard, why not go with a silver standard?
or gold, siver and platinum
Gold doesn't maintain stable value it is the anchor. Gold price was fixed 20.5 dollars/ounce before 1945. Later it was 30 dollars/ounce.
That was more a factor of money manipulation in previous administration's than the fluid price of gold bullion.
That’s because FDR stole the gold from the US citizens then revalued it. Forced people to turn it in at $20 then said it’s now worth $35 a Troy ounce. Essentially stealing around 40% of everyone’s money overnight.
I cannot wait to see this video.
I've been asking myself this question since 1971.
One of the authors for the research cited was from FED itself. Not sure that can be considered an impartial research.
Yes, exactly my thoughts, literally so corrupt
Most of these so called "researches" are funded by the very same people that play the system to their benefit at the expense of millions of lives so we'll just have to accept whatever they do because there are "studies" and "researches" that backed them up.
The problem with our current standard is it allows banks to create credit. If you come to me and ask for $1000 on a loan to be paid back with interest. Banks create credit and is not backed by deposits. This has created the wealth gap.
No one will believe you brother.
No one believes the government is the reason why people are getting poorer.
They don’t understand regulations, taxs, and the fed is why they are becoming poorer
America became the strongest, most affluent, most successful country in the world on the gold standard. That is all you need to know.
2008 wouldnt have happened if we were in the GOLD standard.
There will be a real debt ceiling and there will be proper accountability in government spending.
When the treasury prints more money that equals to debt!
Facts
you can raise/decrease interest rates and do a lot of countervyclical measures even with a gold standard. in fact, keynesian economics was more popular during the gold standard era than now.
I prefer a stable currency based on gold.
ok, who cares.
The U.S.'s reserve of gold equals 8,133 tonnes, worth more than $373 billion.31-May-2019
I think, 8000 ton national gold reserve is not worth of 11 trilliion
The Philippines Hold over a Million metric tones of Gold... and late pres. Ferdinand Marcos let the many banks to Loaned its Gold so the country that Loaned by him will be pass in Gold Standard.. check the wealthiest country in the World by Karen Hudes the lawyer of world bank.
DO THE WISEST ECONOMIES KEEP THEIR GOLD IN THE SAFEST OF VAULTS , I.E. IN THE GROUND ? WEIRD WORLD .
How about tie it to certain quantity calorie diet, watts of energy and time in rent of gov housing. The money will be guaranteed in exchange not via private trade, but at government installations, only. Gov food, energy and housing.
😂
@@ENDEVRDocs I agree,
"watts of energy"
This could be done with crypto.
Fork bitcoin.
Every wallet bitcoin amount will be multiplied by (21000000 / "current max bitcoin amount"). This means there are now 21 billion bitcoins, we reached max amount of bitcoins.
Now we calculate total hashrate divided by 21000000. This finds how much hashrate a coin is worth, lets call it X.
After it, at every block (or every N blocks) we calculate the number of coins needed to make sure Y = total current harshrate / amount of coins, become X.
Those extra coins are reduced from people wallets based at the percentage of total coins they have or (if more coins need to be created) added as the mining reward.
@@exedeath sir, love to comment well on this, but too complex for me. Pegging dollar to crypto, I do like it, but that thing might fluctuate far more than gold would, or food, energy. Doesnt mean this is bad. Bit coin does sound as something relatively stable for now. It consume plenty of energy to maintain. Cant force anyone to sell their bits. How to get those. If Gov start buying, by someone voluntarily selling, that would drive up its value, fluctuation. Nothing says any crypto will remain crypto, in a sense nontaxable, non confiscalable, untraceable. I am sure that is already mostly not so. The demand for bit might drop the way of most other cryptoes. Anyway, bit sound good, but long term iffy to me. I also cant do that math you commented sir, so I dont know how to reply to there. However, tying dollar to energy, with gov buying up that thru long term storage, or other means, like into combustables, even food, water might be more stable sir.
I'm starting to see fiat money akin to crypto in some sort of weird way. You can create more of it if the 'head' people feel like it or decrease it. And it's people's faith in it that makes it really grow and gives it any value.
Imagine the chaos if government wasn't able to bail out failing banks or lock-down the economy and pay people to stay at home being unproductive. Wealth might actually go to the people who deserve it.
I feel highly obliged and humbled by the Grace of Almighty God 🙏🙏
Degital currency (gold currency) is a problem to people who is not fit to computer the tendency that yourmoney will be lost.
If we never left the gold standard, there would of been little or no pointless wars. After all, it was a pointless war (Vietnam war) that got us off the gold standard.
Gold dollar--oil dollar--debt dollar--War Dollar
Very good
A more inclusive 2nd Bretton-Woods conference convened to peg the prominent, western currencies to coinage metals for economic stability (not growth) is the most sensible course of action, yes. The unilateral pegging of the US Dollar to a Gold standard would be somewhere between reckless jingoism and mass psychosis. An international reserve currency would be nice to have in the aftermath of the next financial crisis, wouldn't you think? Considering ALL the coinage metals (Silver, Gold, Platinum, Palladium) instead of just Gold and set to traditional, religiously inoffensive weight standards (Temple Shekel, Koran Dinar, etc.) would probably be the best way to go if humanity wanted reserve currencies robust enough to get us all through the next financier caused ordeal of capitalist greed's overreach. A reserve, non-fiat hard currency for the economic stability of all? Yes, please.
The main point is: why a central bank???
I agree with the video. All the central banks around the world should sell their gold to be put to work in the economy, instead of sitting in a vault underground somewhere.
This video is bunk. They state that the federal reserve wouldn't be able to manipulate interest rates in response to an economic crisis. If our currency were on the gold standard, inflation and hyperinflation would be almost impossible. Therefore, there would be no need to manipulate interest rates.
Having a bunch of gold bars drifting by with the same serial number is more than a little distracting.
🙌🏽🙌🏽🙌🏽
Inflation - only happens with fiat money. House prices, inflated stock markets, flat wages - are why a gold standard is so popular with many. Inflation rises faster than wages with fiat money. It makes the middle class poor.
@Dave McNeal No, inflation is a product of paper money. Every currency crash in the 1800s was caused by devaluation of paper money. The 70s inflation was due to coming off of the gold standard. It also makes the rich, richer - the working class is tied to wages and gets poorer.
@@periculumesse1525 can you explain or link the devaluation of paper money.
Inflation happens when either there is a strong demand and a low supply or when there is a relatively higher supply of currency.
@@rchot84 When there is a high supply of currency, that is wealth. When there is a strong demand for commodities, that is wealth building. Strong demand is always temporary, as prices drive more production or substitution. Value is NOT lost. Inflation is not the scarcity of goods - it is the devaluation of the currency. It is the loss of value.
@@stayswervin554 When governments print money, value is lost. When we buy and sell goods, value just moves around. Real inflation is not the price of gasoline - if there is a free market. A free marked draws in substitution, more production. Electric cars, mass transit, more drilling, pipelines, ethanol, better cars, zoom calls. No value is lost. When we print money, the value of money is lost. We all lose, but particularly the workers who don't own the means of production - or any assets. Printing money dilutes the value of everything.
Why can’t it be a standard on precious metals so you don’t have to just have gold you could have platinum silver.
All of the problems the narrator mentions that the federal reserve has more flexibility to address were actually caused by not being on the gold standard. You simply wouldn't have inflation or the insane debt because the gold standard was a hard check on bad decision making.
This is clearly a US economics point of view.
I gave everything away 😊
The greenback should be "In Gold We Trust" for God's sake!
Probably won't have enough gold if ask for? Probably?
agreement of linking dollar to gold DS
The Gold Standard certainly doesn't provide politicians and the federal government the flexibility they currently indulge in...but since they've crushed us with debt...why would we ever want them to have that flexibility?
Not even gold standard can revive the dollar. Everybody who thinks lost trust!
Trust is lost only once, forever.
Your reasons for no gold standard not convincing😫🥵
Unpegging dollar from gold was a move to create a hedge against us inflation.
Yeah, and how'd THAT work out?
@@Rhiorrha no idea
"Debt saturation" 100%..!
I have the faith that the Federal Reserve will create as much dollars as there are possible numbers in the computer, when necessary.😁
Gold would still be better than what we have now. It really is a pitty that the dollars are exchanged for nothing.
At the rate of inflation and deficit, I think the U.S. should revert back to the Gold Standard.
We have the oil standard now
I owned gold but all i had was a certificate, even owning a kg of gold you never see it, then it turns up the banks couldnt explain where 20% had gone and some was lead inside. banks sold the gold they didnt own. but an hrs work is an hrs work under crypto n banks n stock xchnge fast cats will panic
It's like someone walks into your house, knocks a bunch of stuff over, and then says looks like you have quite a mess here. You'll need me to clean it up! Them printing money without a peg is what caused the messes they say you need the printer to fix.
The "economists" who are consulted are fully indoctrinated into Keynesian economics.
Great Reset is danger, all must go to countryside to farm.
Bill gates bought them all
what happens when the usd $ fails
Bitcoin
Precious metals or crypto.
@@FawazShaikh There are valid competitors to Bitcoin. 99% of altcoins shouldn't exist, and I hope they crash and burn. But Monero is one coin I hope one day outperforms Bitcoin.
all economic inflation. tons of dollars.
this video is BS by saying gold standard would not allow fiscal expansion during the 2008 recession. With gold standard, there wouldn't be a economy collapse like in 2008
Gold standard is very limiting if economy grows at a fast rate, but when economy do not grow or fall then gold standard has it's prime. Economy growth depends most on cheap energy. Such cheap energy last century was oil. Economic return on investment started at 1000:1 in 19 century (you could get 1000 barrels of oil by spending 1 barrel to extract it) and currently we are at 10:1 world average. It's barely enough to keep our infrastructure functional, but not enough for rapid growth and if we don't find source of energy with EROI higher than 10, we will not see world economic growth in the future and it will mean the end of globalization, which is powered by cheap fuel. So we are now in situation where oil will become more expensive, new sources of energy have lower EROI than oil even today and we have huge amounts of government debts around the world fueled by fiat money and cheap energy. When cheap energy is over then GDP growth is over and so is globalization, and fiat money system will face hardest time. Because in the times of economic decline saving instead of spending will become a new motto and fiat money is very bad for savings. And gold is very good for savings, because of it's fixed amount, cheap storage, divisibility (you can buy as little as 1 gram) and longevity.
I’d say instead of gold standard, a bitcoin standard.
Still actual in 2022
It's good to switch back to gold. Countries would think twice to go war.....
Why didn’t they get a real person to narrate this video?
Wouldn’t it be nice to put $1 away and it still be worth $1 years later…one can only dream 😴
I dislike it when people say, “Money only has value because we all believe that it does,” because that simply is not true. You can believe anything you want (that money has value or that it does not have value), but that doesn’t change the fact that it has real value that everyone understands and agrees on-and the amount of money that each bill is worth is printed in ink on it’s pretty little face (well, technically-speaking, it’s printed on all 8 corners of its double-sided, horizontally-shaped body if we’re talking about U.S. currency) 😁
The problem with the dollar American dollar you cannot keep printing Forever Without consequences.. there's no endless money it just don't work that way ..at some point it must collapse..
It is collapsing, we are transitioning to a bitcoin standard.
1 Bitcoin is worth a decent amount of gold
It’s going too
American dollar needs to peg to bitcoin or gold to Stablize
Gold standard must be explored again. The US have been benefiting from fiat money. Faith on the US economy. All the countries around the world are so fond of the paper money which is backed by nothing.
1971 not 1973
It'd not backed by anything that's because it has no value whatsoever
This last days money is gold but you cant use it.
This comment is for anyone here thinking that the gold standard is a "way to go." I would urge you to read either basic macroeconomics[1] (this textbook is not the one I had at the uni, but I think it's better) or the history of the gold standard in the 1920s and 1930s[2]. There is a good reason why nations abandoned the gold standard. I would not much care for the comments under the video of people who are most likely not economists (there is a consensus among economists that the gold standard is not a good idea)[3]. Still, since I happen to be writing a paper about the history of austerity, I could not resist - especially when the gold standard has become a symbol of sound monetary policy among monetarists and economic libertarians. An example is Mark Skousen.
Regarding basic economics, having the gold standard would mean extreme instability in the financial system. Instead of the Fed (or any other central bank for that matter) setting interest rates to manage inflation, Fed would set interest rates based on the amount of gold supply. This is very tricky because the supply of gold is volatile. Monetary policy will become procyclical based on how many new mines of gold are found. When gold is scarce, people curb consumption and increase their demand for gold. The Fed would need to raise interest rates to make other assets attractive and stabilize the gold's price. When the gold floods the market, the reverse happens - Fed cuts interest rates. If we were to adhere to the gold standard during economic crises (as we tried in the 1920s and early 1930s), the central banks would not lower interest rates to increase liquidity in the market - interest rates would be maintained relatively high, and credit in the system would freeze. I don't presume people here arguing for the gold standard are economists, but if some of you are, I will encourage you to read the paper "Bury the gold standard? A quantitative exploration" by Anthony Diercks, Jonathan Rawls, and Eric Sims.[4] The authors revisit the argument for the gold standard and why it is good that we are out of it. As The Economist put it, arguing for a gold standard does not "survive contact with reality "and "it requires Herculean assumptions for the gold standard to beat today's regime."
To some of you arguing that governments run excessive debts and thus we should return to the gold standard - yes, national debts are high. But there are policies to enact. Having austerity in the boom period of the cycle would be one. Switching to gold is not.
Now to those of you arguing that the golden standard worked for centuries and is indeed stable - please feel free to read any book on the history of economics. Lords of Finance by Liaquat Ahamed[5] should be an easy start for non-economists. Let's summarize what happened in the interwar period. Bankers at the time, just like about every single comment under this video, stressed the need to regain stability and financial prudence by returning to the gold standard asap. Countries needed to choose between deflation and devaluation to peg the supply of money to the current gold reserves. Countries which chose deflation (Britain) suffered heavily, with high interest rates and unemployment through the majority of the 1920s(in Britain). Countries which chose devaluation (France) enjoyed a boom in exports and gold reserves. This is problematic because if every nation decides to depreciate the currency's value to increase their gold reserves, the beggar-thy-neighbour race begins. Since all nations had their currencies pegged to the gold standard, the economic success of one nation like France meant that it was exporting unemployment to the U.K. and Germany (since France has devalued the franc).
By the late 1920s, the U.S. began to worry about overheating of its stock market and the recessions in the U.K. and Germany (caused by the gold standard). N.Y. Fed cut interest rates by a half per cent to 3,5% - because of this, the gold started flowing to Europe. In 1928 Fed realized its blunder, so it raised interest rates up to 5%. Gold reserves began floating back to the U.S., while Britain, Germany and France raised their interest rates to stop the outflow of their gold. The rise of interest rates everywhere had a negative effect on aggregate demand, creating more unemployment in return. Race to higher interest rates led to a global fall in production. Countries with already high gold reserves, such as U.S. and France, attracted the remaining gold from the U.K. and Germany. In 1931, the U.K. was forced out of the gold standard in order to make its economy competitive. Within months, the pound fell by 1/3 - with a devalued pound, the U.K. could now compete for global demand again.
US Banks converted the money to gold in 1931, reducing Fed's gold and forcing a decrease in the amount of cash in circulation. This speculative run created a panic. Many depositors feared devaluation, and so they withdrew money from banks, and credit in the financial markets essentially froze.
In the U.S., the gold standard prevented the Fed from expanding the money supply to stimulate the economy. Once off the gold standard, Fed became free to employ expansionary monetary policy.
I sincerely hope the time and effort I put into this comment will not fall on deaf ears for at least some of you. My apologies for some minor mistakes and extreme simplification - this comment is already too long. Now, some people might still argue for the gold standard, and that´s okay with me. I just needed to put this here, since it is my belief that advocates of the gold standard live in an intellectual bubble. If some of you would object to the abovementioned arguments, I´d be happy to provide more justifications and historical examples.
[1] Principles of Macroeconomics - 2020-A, Doug Curtis, Trent University
Ian Irvine, Concordia University Copyright Year: 2017 Last Update: 2020 Publisher: Lyryx Language: English
[2] 1st Edition The Downfall of the Gold Standard By Gustav Kassel Copyright Year 1936 ISBN 9781138569058 Published December 4, 2019, by Routledge
[3] Bordo, Michael D.; Choudhri, Ehsan U.; Schwartz, Anna J. (2002). "Was Expansionary Monetary Policy Feasible during the Great Contraction? An Examination of the Gold Standard Constraint". Explorations in Economic History. 39 (1): 1-28. doi:10.1006/exeh.2001.0778. ISSN 0014-4983.
[4] Diercks, Anthony M., John Rawls and Eric R. Sims. "Bury the Gold Standard? A Quantitative Exploration." Comparative Political Economy: Monetary Policy eJournal (2020): n. pag.
[5] Ahamed, Liaquat. Lords of Finance: The Bankers Who Broke the World. , 2009. Print.
First of all nations didn’t abandon the gold standard; American government did and the rest of the world had to follow because of the petrodollar agreement, second: “consensus” is not an argument that means TRUE look at the consensus of economists on how robust the economy was before 2008 GFC not to mention that economics is definitely not a science. Third: Wars have cost blaming the gold standard instead of the psychopathic governments that started world wars is a red herring argument. I hope you you read more with the intention of being a scholar instead of an Expert. Ludwig Von Mises would be a good start.
I tried watching this but the voice over is too annoying, good for shorts not for long videos
Our standard of living will be low. Like Honduras.
😬
this video is very flawed
Thanks for watching anyway.
@@ENDEVRDocs more research is to be done before publishing
@@Blueblackngold please name a few & enlighten the rest of us
Should we ban sending u.s. dollars outside the U.S. or make u.s. dollars as world single currency because dollars must back in gold for 10 , 5 ,1 dollars and 20 , 50 , 100 can not exchange gold but can only buy manufacturing products but to buy gold they must exchange for lower domination which may had higher rate of exchange just like different currency. If they mine gold in their country then reduce food supply so they dig gold in other country then they had to buy government then instability create chain reaction or higher ethical business
So backing the dollar to something like let’s say BITCOIN is the only logical choice
The gold standard would stabilize prices and we would return to normal and get out from under the Banksters!!
I really think that study mentioned was biased and funded and confirmed to serve the special interest serving the unfair monetary regime we have now. Gold standard very much does mean better welfare than fiat for most people. Definently better welfare than we have now.
Don't forget silver
fails to mention when the currency was gold . for thousands of years up until the 1930 all dept world wide was settled in gold
Долара за злато не това е тоалетна хартия
LOL If we were on the gold standard, there wouldnt be a FED or Central Bank! NO welfare and give me DATS for free programs. We would have low low inflation. Life would be amazing!
The pronunciation of the english words by a robot was a little disconcerting. Might want to use a native speaker of english who is also a real person instead of the computer program you ended up using.
This is gold backed this isn't the cabal sadists mark of the beast
IF IT WOULD HAD BEEN GOLD BACK THERE WOULD HAVE BEEN NO CRISES. SIMPLE AS THAT. THIS IS AN OTHER LIE.
A multitude of lies were stated in this video!
😬 no lies, but thanks for watching.
Sorry, misinformation then
@@stevepiccinnin1157 please name a few & enlighten the rest of us
It’s 2022 Russia and Iraq going gold standard.
Why not peg gold to the dollar??? Everytime those fools print a billion dollars, raise the price (value) of gold by, let's see, 500 dollars an ounce?????
We wouldn't have a global economy.