Okay so idea of me writing this stems from an article titled Liens Filed Against the Federal Reserve: The Key to Trump Ending the Fed & Returning the Gold Standard? It is an interesting read, however I doubt the US or any G7 country would ever return to a Gold Standard. This doesn't mean I don't think non G7 countries will be moving towards a gold standard soon. It also doesn't mean I don't support the idea of a gold standard. I do actually think we need some limitations and control over the amount of money put into circulation. However going back onto a gold standard I don't think will be as easy as we make it out to be. Especially in this day and age.
Problems With Going Back Onto A Gold Standard in The 21st Century
There are many problems with going back onto the gold standard.
- People are so used to the current system, they wont understand how the new system would work. Obviously with a gold standard would require limitted amounts of money to circulate in public. All money circulating would need to be backed by gold. So to many people working for minimum wage will be outraged when their paychecks are less because minimum wage was forced to go down. These people wont even realize that because of the gold standard deflation has occured and everything is cheaper meaning they can afford everything they could before.
- Now many people wont see this as a problem. But others will. In order for a gold standard to work welfare would need to be removed. This means the larger the non working population is the more outrage will occur. If 75% of the population worked this wouldn't be an issue. And yes 75% could be possible if women stopped working.
- The 3rd problem is that we are currently in the digital era, where people buy things online digitally all the time. Now many people may say they could just use Blockchain technolagy for digital online transactions. And yes they could but lets keep in mind blockchain works best when it is decentralized, as well as having a limit. Backing a crypto currency with something like gold means takes away it's decentralization. Since each coin mined needs to be allowed to be exchanged at a central source. Lets also not forget to mention how we got off of the gold standard. We got off of the gold standard because people suspected that the US was printing more paper money then they had in gold holdings. And Nixon removed us from the Gold standard to protect the USD. This is important because backing a blockchain with gold doesn't mean that the gold that it is being backed with today will be their tomarrow for it to be backed. Which would result in what we could say a type of double spending.
- Lastly many Americans are dependent on Credit Cards, and Loans. Banks would be forced to create stricter requirements for getting credit cards and loans in general. Meaning less people would qualify which results in more social problems.
Benefits of a Gold Standard
Now there are some great benefits to being on a gold standard. Here is a list of benefits I could think of.
- Lower taxes. With a limited amount of money in circulation it would be considered inhumane to tax people to much.
- No War Sorry needed to really stress that. And I can't say there wouldn't be any war but there would definetly be less war and wars would be much shorter. The reason for this should be obvious, which is wars costs money, and government would need to encourage people to help fund a war, since money can't just easily be printed.
- Deflation. Yes that would happen. We would see prices of everything drop, this includes, medical, food, clothes, real estate, technology and everything.
- Less drug addiction. It would be more difficult for addicts to obtain easy money to support their habbits, forcing them to slowly get weaned off or in some cases going cold turkey.
- What Should We Do If Not Gold?
I have nothing against using Gold for money. The problem I have is backing money with gold. Which would really just make us go around in a circle. Backing money with gold means gold would be stored in a central location. And for each ounce of gold a unit of money is created to represent that ounce. So the units of money are circulated in public while no one is ever aware of what people are doing with the gold being stored. Which means that gold could be getting sold. Or like what people suspected in the 1970's was that more units of currency where being created then there was for backing of gold. Now crypto users may use to there defense that blockchain prevents such things from happening. And yes blockchain prevents extra units of currency being created or double spent. But the blockchain is digital. It isn't like we can somehow dangle physical gold on the blockchain and raise our hands and say Oh mighty blockchain make sure this gold is always here No instead the blockchain would simply prevent addition units of currency from being created. It would allow for everyone to see transactions conducted using those units of currency. It however opens the doors for government to create secret transactions not seen on the blockchain, using the gold they are claiming is backing the blockchain.
So understanding what said above, should lead us to several ideas on what should be done.
- Simply use blockchain alone with no backing
- Use physical gold as legal tender. And not have gold backing
- Use physical gold for non digital transactions and blockchain for digital transactions
Now once again I love gold and I support it as money. But I do think it is not as powerful as blockchain. At least in the 21st century. If we went strictly to gold there would defently be civil unrest for reasons I mentioned earlier. But even if their wasn't theirs a variable gold is missing that blockchain isn't. We have no idea how much gold there really is. We have a rough idea, but that could be wrong. We could find ways to dig deeper into the earth and find much more gold, if we start to travel out into space we could find gold on other planets. Heck a new gold mine might be discovered in an area on Earth we never knew about before. Its also worth noting gold can in fact be created using a particle accelerator. However it is more expensive to do so. We create elements all the time and gold can be created but it isn't worth it, but that doesn't mean desperation government wont attempt to create the gold.
Blockchain on the otherhand we know exactly how much is their. We decide how much the Blockchain will allow. And we know without a doubt that Bitcoin will never have more then 21 million coins produced. And we know that there is a great chance that X amount will never be circulated due to lost coins, or data corruption on devices.
Now crypto currency users will most likely use to their defence that a blockchain created by the federal reserve, the banks or the government will be written and created in a way that will benefit them first. And I would be delusional to think they wouldn't but that is okay. Yes if government started using their own form of blockchain to replace our current monetary system, it would be okay if they put malicious code into that allowed them to spy on people, and gather all types of information from people. This is perfectly fine. And why do I say this? Because if government replaced the current system with blockchain, every citizen in the country of all ages would become aware of blockchain and how it works. This would in turn benefit all other blockchains like Bitcoin and Ethereum. And those welfare people that would become a problem if we went to a gold standard, they wouldn't be a problem with blockchain. You see if those welfare people want their Obama phone they can have it, but that Obama phone will be mining on the blockchain. And they will be able to get the rewards from blocks they mine.
The gold supporters wont be able to expect all people on welfare to be able to mine gold like I mentioned above with blockchain. The gold supporters wont have decent method of offering a decent retirement methods. Blockchain technolagy can however.
If you like this article please follow and feel free to show support by becoming a Patron or donating some crypto currencies.
Bitcoin 
1AY6rv6QQWsq7ZfnX9fTE85rMVTxeY6jqo
Ethereum 
0xb3a984f8b250E7a60f6E17930Bb2E987778581Db
Litecoin 
LUYUDhGeRC6D5NBr9Xray9fqfPhcqcxV6b
Monero 
4AQPJ7J7CbtJhGUsg3CZHGSJp3TYyU9M9GkSA7RnX4SUFkueQ667NNy82f2T68bkXH8VnVpZuuA8g3NMWDxVT6uARdHFLLK