Why Gold Based International Trade is No Brainer

With the recent strikes on Iran, the United States’ role on the international stage has become a much larger topic of conversation. No one seems sure of the America that will emerge from the tension between historically serving as the world’s policeman and more recently desiring to step back. Even this step back would still be holding onto many of the most important bulwarks of international security. One of these bulwarks of strategic importance is the dollar’s role as most of the world’s exchange currency of choice. It says something about the state of fiat money in general that the dollar is valued for its stability. The fact that so many countries use the dollar to either hoard wealth or trade with other countries creates a great amount of demand for the dollar and is supposed to help American interest both privately and internationally. The strength of the dollar is used often synonymously with American strength, however, America and most other countries would benefit with the return of the classical gold standard as the basis of international trade.

America’s primary benefit from this change would be through the increased range of strategic possibilities. While the dollar’s rule has made buying goods easier, it has often proved to be more of a source of worry than an asset. We must act more predictably and responsibly in the eyes of the world than we would otherwise because we cannot let the dollar lose value through a loss of trust. We feel the need to promote a strong picture of the ever-diminishing dollar in order to let it maintain its reserve currency status. All our striving to prop up the dollar could very easily damage the economy almost irreparably. We put ourselves at risk of massive inflation if for some reason, many of the countries that use dollars for hoarding wealth or exchange currency switched to BRICS. The dollar value is not a reflection of the strength of American industry, rather it is a reflection of the world’s perception coupled with a geopolitically dominant past that no longer exists. A smooth transition to gold pegged international transactions could protect us from this strategic pain point and potential for high inflation. While the adjustment would be difficult, once we had adopted some gold-pegged system for trading with other countries, our ability to trade would remain constant regardless of the rest of the world’s valuation of our currency.…