Was Dropping The Gold Standard A Mistake?
Economics Explained
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The Gold Standard Can't Insure Price Stability
Gold reserves might be very valuable, but compared to all the other industries in an economy combined, it's practically insignificant. This means that interest rates are not being set to stabilize prices. Instead, they hare beeng set to manage the amount of gold the bank has. A true adoption of a gold standard would only really be possible for a few countries because gold is unequally distributed around the world. There is just not enough gold to back all o the dollars out there at anything approaching current market rates.
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