US currency is backed by the credibility of the US political relation and the strength of the US economy. Much of the worldwide monetary agreement relies on US currency as a standard. The growing US debt is one main actor 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 national Reserve notes in circulation. Backing US currency with aureate has myriad problems. The add together of US currency issued lead need to be tied(p) to the organisations gold holdings, and by tying US currency to gold, the government cedes control of monetary policy, making it ineffectual to increase the silver supply in times of economical crisis. US government owns approximately 248 million ounces of gold amounting $405 one thousand thousand at todays determines - thats hardly enough to support a $15 meg economy.
So the price of gold would ware to rise to take US trade in goods and services. therefore it would be verbose to back US currency with gold. withal gold isnt quite an as stable as we great power think. In 1857, the S.S. primeval America sank during a hurricane off mantelpiece Hatteras taking 30,000 pounds of gold to the bottom of the ocean. A major rush 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, erect it on our website:
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