Why does the UK not use the gold standard
I am just curious, why does the UK not base the pound of a gold standard instead of a fiat currency?
(edited 1 year ago)
Reply 2
To devalue the commoners savings.
Reply 4
With fiat currency, your money is not backed by anything so has no intrinsic value.
With a gold standard your money is backed by gold so has some value.
Proponents of the gold standard would claim its better as currencies would lose value at a much slower rate.
However with a gold backed currency you can't print new money, in the US 60% of dollar bills were made during Covid which means it can stiffle economic growth. One of the main arguments for fiat currencies is that the inflation is a feature not a bug, inflation forces consumers to spend rather then save which helps the economy, as this creates more demand for goods/services which creates more jobs which creates more demand for goods/services from more jobs.
With a gold standard your money is backed by gold so has some value.
Proponents of the gold standard would claim its better as currencies would lose value at a much slower rate.
However with a gold backed currency you can't print new money, in the US 60% of dollar bills were made during Covid which means it can stiffle economic growth. One of the main arguments for fiat currencies is that the inflation is a feature not a bug, inflation forces consumers to spend rather then save which helps the economy, as this creates more demand for goods/services which creates more jobs which creates more demand for goods/services from more jobs.
(edited 1 year ago)
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