MrRoundel

Returning to a Gold Standard Is a Bad Idea

Returning to the gold standard is an idea that has merit behind its rationale. However, in order to do this, what do you think gold would have to be valued at today? I'm sure that someone knows how much gold there is in the world, versus how many dollars. If you divide the dollars extant by ounces of gold, we'd probably have to value gold by the milligram. Being that I own some gold, this would be sort of cool, but not likely.
The growth that has taken place in the world's standard of living, especially that in America, has been build on credit and money expansion. It does seem logical to conclude that a major contraction would take place if the dollar was pegged to gold. Again, this might not be catastophic, providing gold becomes valued in the $30,000 per ounce range. I used loose numbers but based on 14,500 tons of gold extant, converted to standard ounces (I realize that troy is different), divided into an M3 number of $13.5 Trillion. I'm no expert so mess with your own numbers but that's what I come up with.