Can a return to the Gold Standard even work? | Planet Infowars

Can a return to the Gold Standard even work?

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June 11, 2012 in Business, Economics, Politics, Preparedness, U.S. News

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One of the main platforms of the Ron Paul campaign has been the continued call to return to the use of “Sound Money”.  Feel free to correct me if I am wrong, but by this they seem to advocate a return to the “Gold Standard” in which the value of the dollar is pegged to gold.  I might be a complete imbecile when it comes to economics but I fail to see how this would work.  Please allow me to pose a few questions so that those of your with more knowledge on the subject can help to fill me in.

The main reason given for a return to the “Gold Standard” is the virtual elimination of the inflationary wave our money system has been riding since the creation of the Federal Reserve System.  I understand that increasing the money supply leads to inflation and that tying money to a limited physical source such as gold lends some control over the amount of money that may be printed.  Here is the part I don’t seem to be able to grasp.  Let’s imagine for a moment that the U.S.’s gold supply has indeed been sold out from underneath us.  If we hold no gold supply how can we tie our currency to something we don’t own?  The biggest complaint I hear is that a privately owned institution (the Federal Reserve) currently controls inflation/deflation through their ability to create unlimited money.  How would this change by going to a gold based system when the same people behind the Federal Reserve also own all the gold?  Wouldn’t they still control the creation of currency by having the ability to control the gold supplies?  Isn’t this what happened during the revolutionary war which caused the printing of Colonial Scrip in the first place?

It doesn’t take a genius to figure out that letting privately owned institutions control your money supply and charge you interest for doing so makes no sense.  I just don’t seem to be able to grasp the concept of fixing it by allowing the same group to control it in a different manner.  Am I missing the boat here?

 

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