Keep the Gold Standard in the History Books
Perhaps there are many good reasons to advocate for the gold standard and I am sure many capable people will put these arguments forth. Count me out. The historical record is overwhelming. The gold standard crashed the world economy in the 1930s. Tying current monetary policy and our international financial arrangements to an anachronism would be an unacceptable risk to the world economic system, in spite of the luster and allure of "the Midas touch."
As Allan Meltzer has correctly said in the past "...we don't have the gold standard now, not because we don't know about the gold standard, but because we do." Let's keep it in the history books where it belongs.
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Even the dollar plunges and even against inflation still gold remains a solid investment. Actually gold prices are going up. Wall Street panics like Orson Welles is reading the War of the Worlds again, yet gold is still solid. The thing about gold is that it’s separate from our normal currency, even though we used to be on the gold standard. At one point, we opted out of the Bretton Woods System, an international gold standard, and began using fiat currency, which is based on credit and not the value of a commodity. Its value has dropped over time, as it is no longer tied to something real, like gold prices .
Yet gold has no real value either... it is just an exchange medium.
Which is what currency is, a medium of exchange that has a commonly agreed upon value. I accept my salary in US Dollars because I live in the US, and I know that I can exchange it for other goods in US.
Tying our currency directly to the gold supply would restrict the growth of our economy to the growth of the gold supply.