Why can’t/shouldn’t we go back to the gold standard?
Gold is a luxury item. Only 10% of gold is used for manufacturing or technical purposes, the rest is used in vanity goods like jewelry or hoarded as an investment. Therefor, its value is perceived rather than practical, and as such the price is subject to whims.
The Short Answer
Gold is a luxury item. Only 10% of gold is used for manufacturing or technical purposes, the rest is used in vanity goods like jewelry or hoarded as an investment. Therefor, its value is perceived rather than practical, and as such the price is subject to whims. (See: gold rising to insane levels as people fear an economic meltdown.) By basing your currency on the stability of your government rather than a finite resource, you open up a lot more flexibility in terms of monetary policy. Also, since governments generally move slow and avoid drastic measures, the value of the currency remains relatively stable over long periods of time, which commodities like gold and oil do not. Short version: Businesses like it when the value of a dollar is stable. It's a lot harder to maintain stability if your currency is tied to a finite resource.
Analysis
Key Concepts: Gold, value, currency
This explanation focuses on gold, value, currency and spans 145 words across 7 sentences. At 113% above the average General Knowledge explanation (68 words), this is one of the more thorough answers in this category, reflecting the complexity of the underlying question.
What This Answer Covers
The explanation opens with: “Gold is a luxury item.” It then elaboratesultimately building toward a complete picture across 7 connected points.
How This Compares in General Knowledge
Ranked #29 of 500 General Knowledge questions by answer depth (top 7%). This places it in the comprehensive tier — the top quarter of most thoroughly answered questions. Questions at this depth typically involve multi-faceted topics requiring nuanced explanation.
Frequently Asked Questions
Is there a simple explanation for why why can't/shouldn't we go back to the gold standard?
Gold is a luxury item. Only 10% of gold is used for manufacturing or technical purposes, the rest is used in vanity goods like jewelry or hoarded as an investment. Therefor, its value is perceived rather than practical, and as such the price is…
How detailed is this explanation compared to similar General Knowledge questions?
This is one of the most thorough answer at 145 words, ranked #29 of 500 General Knowledge questions by depth. The key concepts covered are gold, value, currency.
What approach does this answer take to explain why can't/shouldn't we go back to the gold standard?
The explanation uses direct explanation across 145 words. It is categorized under General Knowledge and addresses the question through 1 analytical lens.