Daily Archives: November 8, 2012

James Mackintosh

Gold prices can be volatile

The argument for a gold standard is simple: it stops the ravages of political interference with the currency. A dollar was worth the same in 1933 as it had been a century earlier, with $20.67 buying one ounce of gold. The example almost every supporter of gold comes up with is that at the start of the 19th century an ounce of gold would buy a very nice men’s suit, as it would at the end of the century; it still will.

There’s no doubt that doing away with paper money stops politicians abusing it, printing money to fund their favourite spending schemes and, in extreme cases, destroying the currency and the economy altogether.