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IPFS News Link • Gold and Silver

Returning to the gold standard would be an economic disaster

• http://www.businessinsider.com, Cullen Roche

Here's why:

The Gold standard does not create "Sound Money" policy. One of the biggest myths about the Gold Standard is that it will create "sound money" policies that won't allow the government to debase the currency.

History shows this is totally wrong.  A gold standard does not restrict the government from devaluing the currency.  Over the course of the existence of the bimetallic system in the USA the ratio of the values in silver/gold relative to dollars was consistently and continuously altered as more of the metals were mined and the economy evolved.

The history of the metallic standard shows very little consistency in the value of the conversion rates and in fact exposes the reality that the gold standard's inflexibility resulted in numerous depressions during which these metallic pegs were consistently altered or abandoned (temporarily before eventually being abandoned permanently).


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