Why has the whole world abandoned the gold standard?


Gold has been used in commodity-money relations since ancient times. The classical gold standard, when paper money could be exchanged for an equal amount of gold at a fixed rate, ceased to exist during the First World War.

The world finally abandoned the monetary system in 1971.

Gold is a fairly rare metal, which accounts for its high cost and low weight. In addition, it is durable, not subject to oxidation and corrosion.

There are also other precious metals — platinum, silver, palladium. But historically, gold has been used longer and more widely, besides, it was gold coins that were valued above all others.

By itself, the golden circulation in the Middle Ages revealed a number of inconveniences. The metal is heavy and difficult to transfer on large transactions. In addition, some unscrupulous buyers and sellers have counterfeited coins, undermining confidence in the money.

With the growth of the population and the development of trade, another problem came to light: the total mass of coins was simply not enough. If the state does not have sufficient reserves of gold, then it cannot mint new coins. Trade, and with it the economy, will slow down.

Paper banknotes solved these problems. Their

During the 20th century, the possibilities of exchanging banknotes for gold began to be limited. After the First World War, only wealthy people could carry out such an operation, since only ingots and at least 12.5 kg each were subject to exchange.

In 1944, people were deprived of this too. As a result of the conference in Bretton Woods, representatives of 44 states

The system lasted until 1971 and fell. The Americans printed a bunch of unsecured money, and if someone demanded to convert it, the United States would not be able to fulfill this requirement.

In theory, no matter what happened in the United States, any state can peg its currency to gold, but no one will.

The size of commodity-money relations has become so great that it has several times exceeded the size of all gold reserves on the planet in principle. And banknotes are no longer able to meet all the need for monetary units, they are being replaced by non-cash payments.

Today gold has gone to the second or even the tenth plan. The real foundation of the modern economy is oil, production facilities, and high technology. Whoever has it all is stronger.

Despite the loss of its dominant position, gold is still valued as a valuable asset. Many countries store their savings in this metal, along with dollars, euros and other currencies.

Russia has

Annually for the payment of pensions country

In addition, it is impossible to sell all 2 thousand tons at once. Nobody will buy metal like that, because it will oversaturate the world market and collapse the prices of all other gold.