SANTA MONICA, Calif., Dec. 31, 2012 /PRNewswire-USNewswire/ -- Prior to 1971, the United States was on various forms of a gold standard where the value of the dollar was backed by gold reserves and paper money could be redeemed for gold upon demand. Since 1971, the United States dollar has been a fiat currency backed by the "full faith and credit" of the government and not backed by, valued in, or convertible into gold.
ProCon.org, a nonpartisan research organization devoted to critical thinking on controversial issues, debuts a brand new issue website, gold-standard.procon.org, and delves into the pros and cons of whether or not the United States should return to a gold standard.
Proponents of the gold standard, including Congressman Ron Paul (R-TX) and Steve Forbes, Editor-in-Chief of Forbes magazine, argue it provides long-term economic stability and growth, prevents inflation, and would reduce the excessive size of government. They say a gold standard would restrict the government's ability to print money at will, run up large deficits, and increase the national debt. They say the economy has historically performed best under a gold standard.
Opponents of the gold standard, including Nobel Prize-winning economist Paul Krugman and Federal Reserve Chairman Ben Bernanke, argue a gold standard would create economic instability and spur periodic economic deflations and contractions. They say a gold standard would hamper government's ability to stimulate the economy during recessions and financial crises. They say economists agree that the gold standard is a bad idea that has historically caused problems for the US economy.
In addition to in-depth research on the pros and cons of returning to a gold standard, the new ProCon.org website contains a historical background section, videos, images, over 100 footnotes and sources, and Did You Know? facts including:
- According to the World Gold Council, the total amount of mined gold that exists in the world weighs about 170,000 metric tons or 5.5 billion troy ounces. Melted across an NFL football field, it would rise 5.4 feet.
- As of 2012, the United States Treasury holds 261.5 million troy ounces of gold. At the current market price of gold ($1,662 as of Dec. 27, 2012) the total value of United States Treasury held gold is $434.6 billion.
- If the United States sold its entire gold reserves at market price, it would pay down 2.7% of the $16.3 trillion national debt. In order to cover the US national debt, the price of gold would need to be about $62,475 per troy ounce.
- On Apr. 5, 1933, President Roosevelt issued an executive order forbidding the private possession of gold. All gold coins, bullion, or certificates over $100 were to be turned in to the government and compensated at $20.67 per ounce. Personal gold jewelry and gold coins with numismatic value were exempted. The right to own gold was not restored until 1974.
- On Aug. 15, 1971, President Nixon announced that the United States would no longer back the dollar with gold reserves ending the last ties between the dollar and gold. Between 1971 and 2012 the US currency in circulation (M1) increased from $48.6 billion to over $1 trillion dollars.
The 47th ProCon.org website is sponsored by Teletrade (www.teletrade.com), an online coin and currency auction house since 1986.
For pros, cons, and related research on whether or not the United States should return to a gold standard, visit http://gold-standard.procon.org.
About Us
ProCon.org (online at www.procon.org) is a 501(c)(3) nonprofit public charity whose mission is promoting critical thinking, education, and informed citizenship. Information is presented on 47 different ProCon.org issue websites in subjects ranging from Obamacare, alternative energy, and medical marijuana to the death penalty, illegal immigration, and gay marriage.
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