The United States abandoned the gold standard completely in 1974. Professor Lawrence H. White discusses what the gold standard was, why it was abandoned, and whether abandoning it was a good idea. The gold standard meant that currency could be redeemed by banks for gold. The dollar had a set value that it retained. If you went to the bank in the gold-standard era before World War I, for example, you could trade $20.67 at the counter for an ounce of gold. Because the currency was guaranteed Read more
It’s often taken for granted that America needs a strong dollar. When the value of the U.S. dollar is strong relative to other currencies, it becomes attractive to investors and allows Americans to buy foreign goods and services cheaply. But in times of recession, are we better off with a weak dollar that stimulates U.S. manufacturing by making our goods cheaper and more competitive? Or will the loss of purchasing power and currency manipulation abroad, offset the poRead more
James Grant, founder & editor of Grant's Interest Rate Observer, predicts that the result of recent Federal Reserve action will prompt a return to the gold standard for the United States. He speaks on Bloomberg Television's "Bloomberg Surveillance."