The gold standard, once held in contempt by economists and financial officials, was the monetary system in the U.S. for 180 years until the early 1970s. During this time, the country did not experience inflation and had significant economic growth. However, after the dollar’s tie to gold was severed, economic growth rates fell by about one-third.
Despite its historic success, there has been universal scorn for the gold standard in recent years. Central banks have been buying gold at a record pace, indicating a potential shift in attitudes towards the precious metal. Events have a way of bringing once unthinkable ideas to the forefront, and it seems that there are unmistakable signs of change regarding the role of gold in the global economy. This segment of What’s Ahead delves into these signs and the potential implications of a renewed interest in the gold standard.