Economics Of The Gold Standard Debate - 963 Words

Economics of Globalization September 18, 2015 Sydnee Lyman The Gold Standard Debate Beginning in 1870, each nation converted their national currencies to their relative worth in gold. This was called the Gold Standard and it has brought up many arguments between politicians, businessmen, and organizations with prominent economists on whether or not to return to it. Although there are multiple reasons why America should not return, there are also many resurfaced ideas that would make it very profitable for us to do so. The United States abandoned the gold standard to finance WWI. Shortly after the war was the beginning of the Great Depression. The Gold Standard constrained governments from helping the financial system and the economy during this time. The reason we abandoned the Gold Standard was because of the crisis our country and many others were in. The Gold Standard began in 1870 in Britain, which ironically was the first country to go off of it in 1931. The United Stated adopted this policy in 1913, this guaranteed the amount of paper money you had could be re turned to the government for the amount it is worth in gold. This made paper money actually worth something to citizens living in nations where they were unsure of the value. When gold deposits were mined, the value of currency dropped. In America, printing money was the cause of hyperinflation. During WWI, many countries abandoned the Gold Standard to finance the war then returned shortly after. Then in 1929,Show MoreRelatedTaking a Look at the 1920s1642 Words   |  7 PagesAlmost all of the countries involved in the conflict were obliged to reduce the gold content in their coins with reference to the period before the conflict. The exceptions were the United States, which returned to the Gold Standard in June of 1919 and England, which returned to the Gold Standard in April of 1925. 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