The Gold Standard has been around for as long as our parents’ parents have been alive. Years ago, gold came in the form of bouillon. Now the price of gold has been at constant fluctuating prices. Gold is known as one of the first metals to have been found. The word gold means yellow and is known to have different uses. Back in the old days, people would trade goods for their gold. Gold was and is also used in the form of jewelry. Gold has played many facets throughout our time. Today we use the US dollar as opposed to gold. They both go hand in hand in terms of the buying power they both have. Today, we use the US dollar to purchase our goods, and other countries use their own monetary. In turn, money is exchanged through the Foreign Exchange Market to purchase goods from anywhere in the world.
Since the time of the Gold Standard, the price of gold has fluctuated. When the US dollar loses its value, the price of gold goes up. As well as when the US dollar goes up, the price of gold goes down. Even though gold is not used in the US in terms of purchasing, the significance of gold will stay because the power it holds over the US dollar. We can look at the value of gold in terms of backing of the US dollar. By definition, gold standard is when countries agree to buy or sell gold for a reputable number of currency units (Ball, McCulloch, Frantz, Geringer, Minor, 2006). Each country has a set number of units of its currency per ounce of gold, and the assessment of the numbers of units per ounce from each country was how they determine the exchange rate between any two currencies on the gold standard (Ball et al., 2006).
There are many stances to contemplate for the use of the gold standard. The gold standard has a few ...