Liquidity-Based Rather Than Fixed Gold Standard

A fixed gold standard will not stop the boom/bust cycle of credit and debt that accompanies economic expansions and contractions. People often forget that the gold standard did not prevent the Great Depression. This is why any 'gold standard' must be liquidity based. Any system that lack flexibility will be repealed during the crisis. Roosevelt quickly learned this lesson in 1932.

Headline: The Gold Rush: Conservative Economists and States Push for Gold Standard

In a move that reflects growing anxiety over rising inflation and a weak economy, South Carolina became the newest state to propose a bill that would make gold and silver coins a form of legal tender in the state.

Utah started the trend, becoming the first state on May 9 to recognize gold and silver coins minted by the U.S. government as legal tender. More than a dozen other states are considering similar moves.

Gold is increasingly taking the spotlight as worries about inflation and a debt crisis grow.

Publisher and one-time presidential candidate Steve Forbes this month joined the chorus of noteworthy economists and businessman predicting a return to the gold standard.

Source: abcnews.go.com