Pros And Cons Of Moving Back The Gold Standard

The Gold Rush was often described as the making of a country, as it was the leading factor of wealth to Australia’s economy. According to the Australian Government, Victoria contributed to one-third of the world’s gold output, which meant that just the gold industry accumulated to more than 18 million dollars to the Australian economy (Australian Government, 2015). In January 1925, Australia economy was halted by a gold standard known as the Bretton-Woods gold-US dollar exchange system to restrict money supply. Given that many of the world’s countries were operating on a gold standard, the gold in Australia was largely controlled by central banks which limited individuals to buy and sell gold. It was not until 1971, with the collapse of the gold system, which formed a new growth

In the beginning of the use of fiat currency, many governments backed the value of the currency with gold. For a while, thirty five United States Dollars could be traded for 1 Troy ounce of gold at a bank. Today however, the USD is no longer backed by gold. Most money today is “just worthless paper”, and if the government endorsing that money fails, it turns that currency into useless paper. (This is causes hyperinflation and recently happened to the Zimbabwean dollar.)

In 1892 Mary E. Lease talks about the low prices in farming and how politicians mislead them and tell them decreasing prices are from overproduction(Document G). Even though Lease thought otherwise data at the time was contrary. Document A shows this. For wheat as production increased price per bushel decreased, for cotton for the most part as production increases the price per pound decreases, for corn from 1870-1885 as production increased price decreased. 1900 in the outliner because production increased and so did price. This is way in Document J farmers are against the gold standard. Big cities were for the gold standard because it helped with industrialization but farmers were against it for a plethora of reasons. Their complaints were gold's inflexibility. When farmers brought their crop to market in the fall, an inflexible currency would cause a shortage of money which would drive down prices. Document H talks about the unpredictability of farming and how this can affect prices of the product. And based on the price of the product it depends how much food a family can keep for themselves. So not only is the production of the product to sell unpredictable but so is the welfare of the family based

There are many cons to keeping the penny and i believe the cons help the argument that we should get rid of the penny. Handling pennies waste many of our time. Many taxpayer’s money are being wasted to make pennies, the government is also wasting money to make the pennies. Rounding up prices wouldn’t matter for the most part. Another con is that making pennies are bad for the environment. Many other countries are getting rid of their lowest coin.

USA Today published the article “Should We Return to the Gold Standard?” written by John Waggoner. Waggoner expresses his firm opinion that the United States should most definitely not return to the gold standard for a variety of reasons. First off, he mentions the practicality this idea poses. The value of gold is as high as it is because of its rarity. Therefore, there is not enough gold in the world to return to a gold standard.

In ridding our economy of the penny, the federal government would first need to convince a public greatly in favor of keeping the penny. As indicated by a poll by the Harris group public opinion shows a strong desire to keep the penny. In fact 59% of Americans have expressed their support of the penny and in low income homes that support rises to 62% ("Abolish the Penny? A Majority of the Public Says 'No'," 2004).

Around the world, people are deciding whether or not the penny should be retired. There are some places that have ended the production of pennies and had a successful penny-free economy, while others are still trying to figure out whether we should still use the penny or not. Now, the cost to produce a penny is more than the actual worth of a penny itself. Finance Minister Jim Flaherty said, “The penny is a currency without any currency in Canada, and it costs us 1.5 cents to produce a penny.” In places such as Canada though, they have no need for pennies anymore because they don’t see the benefits of them, but in places such as the U.S. the penny could be really useful when you actually think about it. When pennies all add up they can really make a difference in the economy and because of this, I believe that the penny should not be retired.

Once off the gold standard, the Federal Reserve became free to engage in such money creation, because the gold standard limited the flexibility of the central banks' monetary policy by limiting their ability to expand the money supply. In the US, the Federal Reserve was required by law to have gold backing 40% of its demand notes. Now free of the gold standards restrictions, all it takes to create money or lend money is typing numbers into a computer. No limit to the creation of currency results in debt that becomes hard to control, and that’s exactly what has happened, and the proof is today’s economy. Right now, the United States’ debt equals approximately $17.075 trillion.

It is my opinion that without the federal government, there would not only be chaos across the board in the private sector, but also in every citizens personal and professional life. With no federal government to back our currency, what would it be worth? How would we exchange the old currency for the new, and who would set the exchange rate? There would be no federal taxes, no regulations on trade – at the interstate and international levels. Who would step in to help resolve matters that involve a transfer across state or country lines? There would also be no federal income tax deducted from our paychecks. While this perhaps seems beneficial, consider this against the certainty that Social Security and Medicare would be over. This would not

During his presidency, William McKinley had many domestic affairs to deal with. Amid the most significant issues, McKinley’s tariff legislation was a big one. Bimetallism was also an important issue. The McKinley administration went after an agreement that would include silver, as a standard European currency. McKinley didn’t like the idea so he began promoting a completely gold-based currency. In 1900, he signed the Gold Standard Act, which officially ended the use of silver as a standard of United States currency and established gold as the only standard. This still affects us today because although no country uses the gold standard, there is a rising support for its reintroduction in the hope of regulating U.S.

One of the characteristics of gold standard defined by Temin is that the adjustment mechanism for a trade deficit country was deflation rather than devaluation, that is, a change in domestic prices instead of a change in the exchange rate. In the event of a balance-of-payment deficit, countries on the gold standard could not devalue their currencies or expand the money supply to stimulate domestic demand, because by doing so would push up good prices, encourage more gold exports, and weaken the currency. Instead, they could only tighten monetary conditions with the goal of reducing domestic prices and costs until international balance was restored. “Critical to this process was the effort to reduce wages, the largest element in costs.” That is to say, the gold standard system must be maintained at the expense of the welfare of ordinary people, which they must either experienced wages fall or unemployment. This mechanism worked well to facilitate trade and exchange before the First World War, the reason,

Holding an ideal as the North Star to guide themselves, men often become blind to the errors with their personal paradigm. Although outside forces may attempt to dissuade an individual away from their inspiration, a sense of self-infatuation can occur, making change nearly unattainable. Masking a deep seeded element, these splendid notions can provide a solace for a soul under duress. Despite the best intentions of those surrounding the individual to derail distressing ideas, often any positive actions are taken as attacks on their character, which drives the individual further down their destructive path. Nonetheless, an abandonment of opposition against the entity's irrational idea can be all the more devastating. Willa Cather, author of

Watching television, we all see the commercials persuading people to buy and sell gold. They argue that gold is a valuable resource that will always be so. Whether this is true has been a controversial issue over many years. People debate over whether it is more beneficial to buy gold or invest money in something else. Popular financial magazines have weighed in on the debate. Whether people should invest gold or save their money is an issue people are willing to research. There are many reasons why people may want gold maybe to give to a loved one or too safe for later use and others decided whether or not gold is a good investment. People who invest in gold, not those who just invest in a small portion of their wealth, but those who truly

The Coinage Act of 1873 was one of the major reasons why the Populist movement started and began forming. There were no real instant effects of the Coinage Act, and not many citizens in America used silver anyway (Friedman). Long term however, the United States would never be the same economically thanks to this monumental legislation. Officially accepting the Gold Standard, the American economy raised the demand for gold immensely, and as a result many gold deposits within America became depleted (Friedman). Consequently, the dollar and employees of America at the time became connected and tied to gold (Friedman). This was not a beneficial relationship, and the United States had become dependent on gold. Add in the fact that gold was being depleted rapidly and the demand for it was growing exponentially

The Golden Age was based on the gold standard. This method acted as a regulator to impose wages and price restraint. This measure brought stability and predictability that greatly facilitated international trade, investment, finance, migration, and travel . Businessmen, investors, and migrants did not have to worry about changes in exchange rates, controls on currencies, and any impediment to moving money around the world. These financial regulations driven on the one hand, producers exported huge quantities of goods and consumers imported a variety of products; on the other hand, investors developed global interest, and international investments grew even more rapidly than world trade, “to forty-four billion dollars on the eve of