US currency is backed by the credibility of the US political relation and the strength of the US economy. Much of the world(prenominal) monetary governance relies on US currency as a standard. The growing US debt is one main causation masses fear ostentation and think that the monetary system is by of control. The Fed holds collateral such as US Treasuries and giving medication securities, equal in value to the federal official Reserve notes in circulation. Backing US currency with prosperous has myriad problems. The add together of US currency issued ordain need to be tied(p) to the organisations golden holdings, and by tying US currency to gold, the government cedes control of monetary policy, making it unable to increase the silver supply in times of scotch crisis. US government owns approximately 248 million ounces of gold amounting $405 jillion at todays wrongs - thats hardly enough to support a $15 meg economy.
So the price of gold would fuck off to rise to take US trade in goods and services. and then it would be verbose to back US currency with gold. excessively gold isnt quite an as stable as we efficacy think. In 1857, the S.S. primeval America sank during a hurricane off ness Hatteras taking 30,000 pounds of gold to the bottom of the ocean. A major come across could lead to inflation as it did when the US discovered gold in calcium and in Alaska. In addition, governments could manipulate the price of gold by buying or selling it on the open market.If you want to get a full essay, distinguish it on our website:
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