US currency is backed by the credibility of the US political relation and the strength of the US economy. Much of the planetary monetary arranging relies on US currency as a standard. The growing US debt is one main precedent 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 federal Reserve notes in circulation. Backing US currency with luckyen has myriad problems. The add together of US currency issued give 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 unavailing to increase the silver supply in times of scotch crisis. US government owns approximately 248 million ounces of gold amounting $405 meg at todays tolls - thats hardly enough to support a $15 meg economy.
So the price of gold would slang to rise to take US trade in goods and services. and so it would be verbose to back US currency with gold. likewise gold isnt quite an as stable as we mightiness think. In 1857, the S.S. primeval America sank during a hurricane off drape Hatteras taking 30,000 pounds of gold to the bottom of the ocean. A major go down 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, army it on our website:
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