> The idea behind a gold standard is that a currency becomes tied to a commodity with a stable value. The great problem with this is that gold does not have a stable value. Like any other commodity, its relative value goes up and down. For instance, in September 2022, US dollar milk prices were rising over 16%. In gold terms milk prices were rising over 23%—dangerously high inflation.
The "stability in CPI" after the gold depeg in the 70s is also when wages stopped growing in real terms. Most "wealth creation" since that date is on paper.
most wealth creation being on paper is because labor stopped getting paid and capital saw all the growth
kinda like how despite all of the inflation the average person only saw a 3% increase in actual take homes while the hyperwealthy saw 300% (of much, much larger numbers).
With a decent central bank you can, as the rate of inflation is fairly predictable:
* https://en.wikipedia.org/wiki/Inflation_targeting
We've recorded some of the most stable prices in the last few decades with that policy:
* https://en.wikipedia.org/wiki/Great_Moderation
as compared to when the gold standard was around:
* http://archive.is/https://www.theatlantic.com/business/archi...
And gold isn't as stable as most people think:
* https://www.macrotrends.net/1333/historical-gold-prices-100-...
even in the modern age:
> The idea behind a gold standard is that a currency becomes tied to a commodity with a stable value. The great problem with this is that gold does not have a stable value. Like any other commodity, its relative value goes up and down. For instance, in September 2022, US dollar milk prices were rising over 16%. In gold terms milk prices were rising over 23%—dangerously high inflation.
* https://www.ubs.com/it/en/wealthmanagement/insights/article-...