Was Dropping The Gold Standard A Mistake?
Economics Explained
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Is the Money Supply Restricted?
If the money supply is restricted to what a central bank has sitting in a vault, then there may not be enough liquidity floating around to facilitate genuine expansion. Running an economy on a gold standard is like writing bak with training wheels. You are never going to see someone doing the tour to france with training wheels on. Just like you aren't going to see a modern, advanced global economy conducting business backed by gold. Gold can't protect us from every thing. And neither of these safety measures are good alternatives to being able to steer the bike or the economy properly.
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