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Returning to a Gold Standard Is a Bad Idea

As Nathan Lewis points out in "Gold, the once in future money", a 100% backing bij gold is not necessary. In a gold standard, the amount of base money is not determined by the amount of gold hoarded by monetary authorities. Even redeemability with a government is not necessary. It is possible to maintain a gold standard, even without holding any gold. Monetary authorities can always buy gold or borrow gold on the open market. The crucial point is that central bank use gold properly to manage the value of the currencies. Gold standard was used quite succesfully in England for 2 centuries, while the BoE held very little gold.

Further, if several countries would adhere to a gold standard, we would immediately have a world currency. Any country could join unilaterally, without approval by some central body and restrictions.

I fail to see the disaster imagined by the author.

How Can the Dollar Rally As Oil Soars?

The USD is far from hated - yet. Look at all the $ held by Asians and Arabs ! The $ still has a long way to go.