The Gold Standard

On March 14, 1900, the Gold Standard Act was was ratified, which put the United States currency on the gold standard. The United States originally had established a silver standard and with the passage of the Coinage Act of 1792, legal tender status was given to both gold and silver. Many economists disagree on when the gold standard was actually totally abandoned. Some say it was in 1913, after the Federal Reserve Act was signed into law. Others say it was in 1933, when United States President Franklin D. Roosevelt signed Executive Order 6102, which forbade the hoarding of gold coins. Or, perhaps it was in 1971, when President Richard M. Nixon suspended the direct international convertibility of the United States dollar to gold.

Even today, there is much debate on this topic. Many mainstream economists are opposed to the the idea of returning to a gold standard. Opponents of the Federal Reserve, fractional reserve banking, and fiat currenty (who are typically constitutionalists, followers of the Austrian School of Economics, and free-market libertarians) believe that a gold standard should be re-established to ensure price stability, remove monetary policy powers from the central bank, and curtail inflation.