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Why is there not a single country in the world on a gold standard TODAY?
I realize governments prefer to print their own money. It gives them more control.
But if sound money is superior how is there not a single benevolent president or king or whoever who decided it would be best to 100% back their countries currency with gold after 1971?
Is it the fact that every other country would have to play along or what am I missing there?
There are 180 different currencies in the world you would think that at least one country would have attempted this.
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6 Replies
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That’s a really good question. I suspect the power to print is too alluring for most countries. Another thing that could be happening is the promise of free money. There may be a minority of benevolent leaders that would be willing to do this, but when the run up against someone promising something for nothing, the other party gets elected. Thus, rendering the benevolent leader worthless.
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Thanks. The fact that a party who would promote this can not promise voters the same short term benefits as a party who can keep printing money is something I have overlooked. I suppose that would also go back to the fact that parties in a democracy are usually only elected for 4 years.
With that I now wonder if there are any parties in any country who have attempted this or who have come close..
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I suspect this is where a monarchy would be superior, countering the 4 year election cycle of so-called democracies.
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One of the reason i would argue is the fact that Gold is not held by one single nation only. Despite the fact that the US has the most but all other countries who also have gold reserve far exceeds US gold reserve if we add them together so my point is that it will be hard to determine the hegemony in this case and come up with a solution. That’s one of many reasons i would say. Thanks
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Wouldn’t it give the country who starts to do this first a jump start?
Say Switzerland does this. They are the 7th biggest gold holder but only the 20th biggest economy worldwide. I don’t see how they wouldn’t benefit but someone smarter than me needs to chime in on this. I have tried to google a good answer but couldn’t find anything.
Here is a list of who holds the most gold and the west dominates the statistics
https://tradingeconomics.com/country-list/gold-reserves
(Pretty surprised to see Germany and Italy at 2 and 3 respectively.)
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I think whoever starts first does not matter because you can start first but only have a small percentage of gold reserve which does give you any kind control. That’s my opinion at least.
Thanks
