Why The Gold Standard Is Still The Best Option

Why The Gold Standard Is Still The Best Option

Share to Linkedin The historical record is clear: countries that have currencies based on gold tend to do very well. Those that don't, usually run into difficulties. The United States had a dollar based on gold (with some lapses) from 1789 to 1971, and became the wealthiest and most successful country in the world. Soon after the US gold standard era ended on August 15, 1971, someone asked the 31-year-old economist Arthur Laffer what he thought the outcome would be. "It won't be as much fun to be an American anymore," he reportedly said. Some people today still ask: "WTF happened in 1971?" Laffer had it all figured out. If you want to understand why things work out this way — why Arthur Laffer could make a prediction like that, and be right — you have to understand the principle of Stable Money. It's very simple: money is best when it is stable in value. It doesn't go up or down in value, as might be expressed in the foreign exchange market. Today, Turkey's currency, the lira, has been falling in value, and we generally look at this as a bad thing. Why is that? But, we don't want currencies