Return to Gold Standard for the US

In 1933, the gold standard was ended for the United States. Despite the creation of the Fed, a
wave of bank runs resulted in massive bank failures over the period 1930-1933. The Fed failed to
provide sufficient liquidity to enable the banks to meet their customers’ demands for cash.
This failure was due in part—and possibly largely—to the gold standard. For the Fed to generate
enough cash to meet the public’s changed demand for it, it would have had to create much more
money and to lower interest rates.

Can a growing economy continue to grow with a finite or restricted money supply?

The U.S. holds 8,133 metric tons of gold reserves, according to the World Gold Council, or about 261 million ounces. At current market prices of about $1,667 an ounce, those reserves are worth roughly $435 billion.

That would cover less than 3 percent of the $15.9 trillion in Treasury debt outstanding. In fact all the worlds’ reserves -- estimated at 31,353 tons, or just over a billion ounces -- is not nearly enough to cover the outstanding U.S. debt.