[Gunslingr3]

Gold Standard people are never able to answer the question as to why the Gold Standard was abandoned in the first place, because of the economic instability it introduced, which lead to the creation of the Federal Reserve.

The gold standard actually serves to limit instability by curtailing excess credit.

Greenspan explains this more succinctly that I think I could, but if there is something yet unclear after you read it ask and I'll try to better explain:

Gold and Economic Freedom

[MichaelRDanger]

Gold Standard people are never able to answer the question as to why the Gold Standard was abandoned in the first place, because of the economic instability it introduced, which lead to the creation of the Federal Reserve.

The gold standard actually serves to limit instability by curtailing excess credit.

Greenspan explains this more succinctly that I think I could, but if there is something yet unclear after you read it ask and I'll try to better explain: Gold and Economic Freedom

Greenspan ignores the important issue of the effects of price volatility of a single commodity. Gold cannot add stability if it's price is inheritably unstable. If you know your history the 19th century suffered two depressions when the price of gold dropped sharply.

As an example: We know the Chinese have been buying gold over the last decade or two. If they were to liquidate a major portion of those holdings the price of gold would drop sharply due to supply and demand. If our currency was tied to a single commodity this price drop would have the potential to crash our economy. Returning to the Gold Standard would add instability and make our economy vulnerable to actions by our enemies.

If you wanted to add stability you would tie our currency to a broad range of commodities instead of a single commodity. But then again this is what the Fed does "in theory". Replacing a broken system with a system that is far more broken does not solve the problem.