Backing the Us Currency with Gold

US currency is backed by the credibility of the US political relation and the strength of the US economy. Much of the global monetary system relies on US currency as a standard. The growing US debt is one main reason masses fear ostentation and think that the monetary system is by of control. The Fed holds collateral such as US Treasuries and giving medication securities, equal in value to the Federal Reserve notes in circulation. Backing US currency with fortunate has myriad problems. The add together of US currency issued will need to be tied(p) to the organisations gold holdings, and by tying US currency to gold, the government cedes control of monetary policy, making it unable to increase the silver supply in times of economic crisis. US government owns approximately 248 million ounces of gold amounting $405 billion at todays prices - thats hardly enough to support a $15 meg economy.



So the price of gold would have to rise to take US trade in goods and services. Thus it would be verbose to back US currency with gold. Also gold isnt quite an as stable as we might think. In 1857, the S.S. primeval America sank during a hurricane off Cape Hatteras taking 30,000 pounds of gold to the bottom of the ocean. A major strike could lead to inflation as it did when the US discovered gold in calcium and in Alaska. In addition, governments could manipulate the price of gold by buying or selling it on the open market.If you want to get a full essay, order it on our website: Orderessay



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