Frank breaks down the history, controversies, and basics of the Gold Standard in just 7 minutes.
Additional Links and Resources:
Wikipedia is actually a great source to get the basics on the gold standard. No, REALLY. I know, I know. Your college professors promised to fail you if you even thought of using it as a source, and that has biased you against it. It’s ok. No one is grading you here. We won’t tell.
The gold standard has come up in this presidential election from some Republican candidates. This New York Times article addresses those proposals through the lens of several historians.
History.com has a brief overview of how and why FDR took the USA off the gold standard in 1933.
Matthew O’Brien lays out the arguments against returning to the gold standard in his Atlantic article “Why the Gold Standard Is the World’s Worst Economic Idea, in 2 Charts.”
The gold standard limited central banks from printing money when economies needed central banks to print money, and limited governments from running deficits when economies needed governments to run deficits. It was a devilish device for turning recessions into depressions. The answer is that some people aren’t worried about depressions. Some people are worried about inflation. Even when none exists. To them, these fetters are the feature, not a bug.
It’s a simple idea. If governments can’t print or spend too much money, prices should be stable. Simple, but wrong.
Back in 2011, the state of Utah took an interesting step toward a gold standard by eliminating state taxes on the exchange of gold coins. Read more here.
The Cato Institute issued a paper (“Is the Gold Standard Still the Gold Standard among Monetary Systems?“) with a cautiously pro-gold standard slant.
You can read the whole interview with Allan H. Metzler that Frank quotes at the end of podcast here.
Well, all the way back to the 1970s I used to debate Ron Paul on radio about the gold standard. And of course, as you know, he’s an advocate of the gold standard – was then and is now. My final remark to him on almost every occasion was, “Look, we don’t have the gold standard. It’s not because we don’t know about the gold standard, it’s because we do.”