President Trump has gone on the record saying that he is in favor of reintroducing the gold standard in order to make America great again.
The gold standard is a system in which currency values are directly tied to gold, allowing nations that have different currencies to exchange gold with eachother.
Coinworld.com reports:
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Sean Williams of The Motley Fool, a website devoted to investing news and opinions, posed the following question last week:
The question was asked based on the fact that Trump told GQ last year that bringing the back the gold standard would be tough, but “wonderful.”
Impact on possible return
Williams says most economists don’t think that a return to the gold standard, which was abandoned by the U.S. in 1971, would be a positive fiscal move for the United States, as it was the move away from the standard in 1933 that played a large role in getting America out of the Great Depression.
Various issues could arise from a return to the gold standard, Williams explains. The value of gold can swing tremendously, which could have drastic impacts on the value of the U.S. dollar. We can forecast gold’s market all we want, but as Williams tells us, things can change quickly.
“For example, between 2011 and early 2016, the price of gold on a per-ounce basis fell by 45%,” Williams writes. “Also, the gold market tends to stay in bull and bear markets for an extended period of time (a decade or longer), meaning recessions would be particularly hard for the U.S. economy to overcome if gold’s per ounce price was also low.”
The market as a whole is at an interesting place, as the new U.S. president offers reasons to think the value of gold may increase. His lack of polictal experience could mean a looming trade war with other nations, Williams writes, and the success or failure of his proposed tax reforms could have major implicatiosn for the price of tangible assets.
He loves gold
Trump’s enthusiasm for gold stretches back into the 1970s.
Williams writes that Trump bought lots of gold when the U.S. legalized private ownership of the metal in 1975.
“Selling for about $185 an ounce at the time, Trump noted that he sold his stake between $780 an ounce and $790 an ounce, calling the money-making investment ‘easier than the construction business.’”
His full quote to GQ last year on a return to the gold standard was, “Bringing back the gold standard would be very hard to do, but boy would it be wonderful. We’d have a standard on which to base our money.”
Don’t expect the gold standard to make a dramatic return, but with Trump in office, we’ve all learned to never say never.
Sean Adl-Tabatabai
You do that and kick out the federal reserve banking system (central banking) and even I might begin to believe your legit.
That might be more difficult than it sounds. Where will he get enough gold to keep the value of the dollar up? But you’re dead ON about the Fed.!!
I prefer silver as a reserve. It’s ubiquitous, and more resistant to hoarding. I am strongly opposed to fractional reserve money creation and privatized central banking. That said, I prefer fiat, with minimal hoarding and availability issues, and some reserves (not ‘fractional reserve money creation’). That means I support bringing back the gold as reserves. One other thing… Move the CPI/inflation calculations to amendable only by an act of congress, and not overseen in the executive. 😉
IAM waiting andy cippolo`s brother?