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Friday, 23 March 2012

Problems with a gold standard

The chairman of the US Federal Reserve Bank, Ben Bernanke, enumerated the problems with a gold standard, should one be considered as a replacement for the currently deteriorating western fiat currency system.

With the steady devaluation of the US dollar and other currencies, and with the displacement of the US dollar as the global reserve currency, speculation has arisen about the nature of a new global currency system.  Some have advocated a reversion to the gold standard.  Mr Bernanke identifies the reasons why a gold standard is not a good idea.

See Mineweb's article "Fed's Bernanke: gold standard systems didn't work before, won't work now", which I acknowledge with thanks.

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