What Was The Gold Standard? The Gold Standard vs. Fiat

New Post Public Reply Private Reply Replies (0) Message Board
PoemStone smackles #17478

What Was The Gold Standard?
The Gold Standard vs. Fiat Money



Standard
My normally extensive Economics Glossary does not have an entry on the gold standard, so we'll have to look elsewhere for a definition.


An extensive essay on the gold standard on The Encyclopedia of Economics and Liberty defines the gold standard as "a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National money and other forms of money (bank deposits and notes) were freely converted into gold at the fixed price." A county under the gold standard would set a price for gold, say $100 an ounce and would buy and sell gold at that price.

This effectively sets a value for the currency; in our fictional example $1 would be worth 1/100th of an ounce of gold. Other precious metals could be used to set a monetary standard; silver standards were common in the 1800s. A combination of the gold and silver standard is known as bimetallism.
A Very Brief History of the Gold Standard:

If you would like to learn about the history of money in detail, there is an excellent site called A Comparative Chronology of Money which details the important places and dates in monetary history. During most of the 1800s the United States was had a bimetallic system of money, however it was essentially on a gold standard as very little silver was traded. A true gold standard came to fruition in 1900 with the passage of the Gold Standard Act.

The gold standard effectively came to an end in 1933 when President Franklin D. Roosevelt outlawed private gold ownership (except for the purposes of jewelery). The Bretton Woods System, enacted in 1946 created a system of fixed exchange rates that allowed governments to sell their gold to the United States treasury at the price of $35/ounce.

"The Bretton Woods system ended on August 15, 1971, when President Richard Nixon ended trading of gold at the fixed price of $35/ounce. At that point for the first time in history, formal links between the major world currencies and real commodities were severed". The gold standard has not been used in any major economy since that time.

What Do We Use Today?

Almost every country, including the United States, is on a system of fiat money, which the glossary defines as "money that is intrinsically useless; is used only as a medium of exchange". We saw in the article "Why Does Money Have Value" that the value of money is set by the supply and demand for money and the supply and demand for other goods and services in the economy. The prices for those goods and services, including gold and silver, are allowed to fluctuate based on market forces. Next we'll look at how the monetary system used can change other variables in the economy.

goldbill.jpg

Our Expert Recommends:

Gold Standard & Fiat Money

What Is Gold's Impact on the Economy?

Return to the Gold Standard

The Bretton Woods System

President William McKinley: Set the Gold Standard

Monetary Policy & Inflation

What Is Inflation?

Why Does Money Have Value?

The American Dollar and the World Economy

Gold standard From Wikipedia

What is the gold standard? Investopedia
Featured stocks: Coffee Shoppe
For conservative debate: "Keeping it Real"
Game Changing stock $SHMP

Scroll down for more posts ▼

Top 10 Most Recent News Articles

Endava's Stock Tumble Sparks Investor Class Action

Updated Category News Views 2

A Rocky Day for Endava Investors Here's the thing, on September 21, 2026, Endava plc hit a rough patch that left a mark. After the market closed, the company announced that it had put its Chief Financial Officer, Mark Thurston, on administrative leave. This wasn't just a routine shuffle; it came on the heels of the Board's Audit Committee finding reason to probe into...

Continue Reading
CorePower Yoga Expands in Miami with New Studios

Updated Category News Views 9

Greasing the Wheels of Miami's Wellness Scene If you're living under a rock, you might not have noticed, but CorePower Yoga is making some serious moves in Miami. We're talking about two new studios opening their doors: one in Midtown Miami, already rolling out the mats as of October 19, and another flagship joint soon to hit Coral Gables. Clearly, they see the demand for...

Continue Reading
Geothermal Energy Gets Boost with GRMS Adoption

Updated Category News Views 4

Geothermal's Big Leap with the GRMS The oil and gas sector didn't explode overnight—it leapt due to a consistent, standardized language that spoke to investors like a charm. Now, the geothermal industry is borrowing a page from this book of success with the Geothermal Resources Management System (GRMS). Finally, a framework not just built on hope and hot air, but...

Continue Reading
Call to Action: Make Disease Cure the Top Election Issue

Updated Category News Views 3

A Call for Congressional Accountability The American Center for Cures is banging the drum for change, and they're banging it loud. Founded by Lou Weisbach, this group has come out swinging, urging Americans to slap disease onto the ballot in the midterms. Why? Because dealing with Alzheimer's, diabetes, heart disease, and cancer every year rips a whopping $1.1 trillion...

Continue Reading
Norwegian Bella™: A New Era in Luxury Cruising

Updated Category News Views 5

Setting Sail with Norwegian Bella™ in 2028 When you hear about another cruise ship hitting the water, eye rolls might come naturally. But Norwegian Cruise Line's latest announcement adds a few twists worth noting. Today, the big news is that the Norwegian Bella™, the freshest face in NCL's innovative Prima Class, is now open for bookings. This beauty will start its...

Continue Reading
NSSF Battles NM's Unconstitutional Gun Law in Court

Updated Category News Views 6

Taking Shots at New Mexico's Gun Laws You've got the National Shooting Sports Foundation (NSSF) heading back into the legal trenches. Fresh lawsuit filed, they're targeting New Mexico's Attorney General, Raúl Torrez, for trying to keep a seven-day "cooling off" period intact that they've already been told is unconstitutional. Look, this ain't their first rodeo with this...

Continue Reading
Zika Virus: A Surprising Ally in Brain Cancer Fight

Updated Category News Views 9

Here’s something you don’t hear every day: using a virus that typically targets the brain not as a foe, but as a formidable ally in the war against glioblastoma. It’s a gutsy play by UP Oncolytics, a scrappy biotech outfit cradled within Rosalind Franklin University’s Helix 51 incubator. Risky Bet on a Known Adversary Glioblastoma—a real beast in the cancer...

Continue Reading
AI Agents Race: 10M Downloads Spark Competitive Fire

Updated Category News Views 4

The AI Agent Arms Race is On Throwdown time in the AI jungle, folks. A new AI agent hit the big 10.9 million downloads in a mere six weeks. In the digital world, those kinds of numbers are the equivalent of finding a unicorn in your backyard. This data gem comes courtesy of Sensor Tower, as reported by Yahoo Finance, and it looks like the appetite for this technological...

Continue Reading
Parents as Teachers Podcast: Anthem Awards Finalist

Updated Category News Views 4

Celebrating Impact Through Parenthood Narratives Blending heartfelt stories with educational insights, the Parents as Teachers Podcast stands tall as a Finalist in two categories of the 6th Annual Anthem Awards. Recognizing achievements in Content & Media for both Education, Art & Culture and Health, this nod acknowledges the profound impact being made on family...

Continue Reading
PrecisePK Celebrates 40 Years of Revolution in Dosing

Updated Category News Views 1

Forty Years of Changing the Game There’s something to be said for sticking around in an industry for four decades. PrecisePK, a name that's become synonymous with precision dosing, has been revolutionizing how pharmacists do their jobs since 1985. This isn’t just a company resting on its laurels; it’s at the forefront of technological integration in healthcare....

Continue Reading

Top 5 Most Recently Viewed Articles

Abeona Therapeutics Achieves Milestones with ZEVASKYN Launch

Updated Category News Views 109

Abeona Therapeutics Financial Overview and Recent Progress Abeona Therapeutics Inc. has recently made significant strides with the launch of ZEVASKYN™, a groundbreaking therapy. This innovative treatment is designed to address the urgent medical needs of patients suffering from recessive dystrophic epidermolysis bullosa (RDEB). With the FDA's approval, the company is on...

Continue Reading
Projected Growth of Monk Fruit Sweeteners Market Through 2032

Updated Category News Views 133

Monk Fruit Sweeteners Market Growth Overview The monk fruit sweeteners market is witnessing a significant transformation, spurred by health-conscious consumers seeking natural alternatives to sugar. This market is projected to experience a steady growth trajectory, reaching a remarkable $147.2 million by 2032. The expected compound annual growth rate (CAGR) is estimated...

Continue Reading
Discover Ultimate Luxury and Marine Animal Adventures in San Diego

Updated Category News Views 175

Experience Luxury in San Diego San Diego has long been known for its stunning coastlines, vibrant culture, and world-class attractions. Visitors seeking a once-in-a-lifetime getaway can book the Ultimate San Diego VIP Getaway Package. This exclusive offering combines luxury, adventure, and unforgettable experiences designed to pamper guests in a seamless and enjoyable...

Continue Reading
7 Easy-to-Miss Issues That Might Be Slowing Down Your Manufacturing Operations

Updated Category Business Views 156

Every manufacturing business wants the same things. Orders moving on schedule. Machines staying busy. Teams hitting production targets. But sometimes, even when you do all the right things, output slips. People stay busy all day. Yet somehow, less work gets done. And you can’t pinpoint why. The biggest slowdowns don’t announce themselves. They build up over time. They...

Continue Reading
Made-in-China.com's Impactful Exhibition at BIG 5 Global Event

Updated Category News Views 124

Made-in-China.com Showcases Chinese Suppliers at BIG 5 Global Recently, a remarkable event unfolded at the BIG 5 Global, which took place in Dubai. Made-in-China.com highlighted the talents of 15 prominent Chinese suppliers, showcasing their innovative construction materials aimed at enhancing urban development and infrastructure across the globe. This significant...

Continue Reading