Back in the 1970s, the US dollar was taken off the gold standard – a move that was supposed to be temporary. Sound familiar? Like council tax, which began life as hearth tax, then window tax, then poll tax before becoming the never-ending bill it is today. Once governments find a way to extract money, they rarely let go.
By unpegging the dollar from gold, the US government (and others who followed suit) unlocked the ability to print money at will. And print they did. Since then, we’ve seen rampant inflation, hyperinflation in extreme cases (hello, Venezuela), and the slow, steady erosion of purchasing power in everyday currency.
Inflation: The Quiet Thief
Debasing currency leads directly to inflation. Why? Because it weakens the value of money itself. A £1 coin today doesn’t buy what it did last year – and certainly not what it did in 1971. In contrast, if we’d stayed on the gold standard, a £1 coin would likely retain the same value year on year. Gold, being a finite and tangible asset, naturally limits the supply of currency and, with it, inflation.
Sure, the fiat system has its perks. Governments can respond to crises by printing money, stimulating the economy in the short-term. But we pay for that with higher taxes, VAT increases, and inflated prices. It’s a vicious cycle – and guess who gets hit hardest? Not the elite. Not the wealthy. It’s Ethel down the road, trying to stretch a state pension across skyrocketing energy bills and supermarket shelves that feel more expensive by the week.
No Incentive to Save, No Stability to Trust
Fiat currency removes any incentive to save. What’s the point of putting money away when it’s worth less tomorrow? Exchange rates become guesswork, investment strategies have to account for inflation, and long-term planning is built on shifting sands. Even gold, ironically, isn’t immune to inflationary trends – though it’s widely used as a hedge in volatile periods, it doesn’t perform the same when inflation is low and economic optimism is high.
But here’s the kicker: despite abandoning the gold standard, the world hasn’t fully let go of gold.
The Gold Rush (Again): Central Banks and a Tier One Asset
Until recently, banks could only account for 50% of the value of their gold holdings as reserves. But as of July, that’s changed. Gold has been reclassified, and banks can now treat it as a Tier 1 asset – valuing it at 100% on their balance sheets. That seemingly minor change has triggered a quiet frenzy: banks are buying gold by the ton, hoarding it in anticipation of… well, something.
This spike in demand has driven prices up, and it’s likely to continue. While there’s no official move to return to the gold standard, the reclassification suggests gold is being repositioned as a critical financial asset – one with real influence over the global economy once again.
So what’s going on? Could this be the early tremors of something bigger?
A Broken System and the Inevitable Crash
Our current system relies on governments spending money they don’t have and borrowing against the promise of low interest rates. But those low rates are artificial, enabled by central banks that claim to be independent – but answer to the very governments they supposedly regulate.
Look at the UK. In 2020, inflation was 0.5%. By March 2025, it had jumped to 2.6%. The HS2 rail project, once touted as an economic saviour, was slashed because inflation made it financially unviable. On a gold standard, that wouldn’t have happened – not because HS2 would’ve been saved, but because we probably couldn’t have afforded it in the first place.
Fiat currency allows for vanity projects, bloated budgets, and endless borrowing – until the music stops. And when it does, crashes happen. We’ve seen it in the late 1980s, the 2000 dot-com bubble, 2008’s housing crisis, and arguably in 2020 (although that was more pandemic than monetary mismanagement). Still, the result is the same: boom and bust.
Should we return to the Gold Standard?
In theory, yes. A gold standard would anchor currencies, curb reckless spending, reduce inflation, and restore purchasing power to everyday people. It would make economic cycles more stable and protect the most vulnerable in society. The gap between Ethel and the elite might actually narrow.
But in reality? It’s likely a fantasy.
Returning to the gold standard would send gold prices skyrocketing. Countries with limited reserves would be priced out or forced into debt, plunder, or war to secure more. Those with worthless currencies wouldn’t be able to buy in at all. It could spark global conflict, economic upheaval, and financial exclusion on a massive scale.
And what’s to stop a powerful nation from printing trillions in fiat money today, using it to buy up global gold reserves, and then conveniently switching back to the gold standard once they hold all the cards?
A Gold Standard World Would Be Fairer – But Far Messier
The truth is, while the gold standard would be better long-term, it would be catastrophic in the short-term – unless the entire world moved together. That’s unlikely. And until it happens, any single country adopting it risks financial ruin.
But isn’t that what they said about Brexit?
We live in a messy, manipulated system where fiat currency gives governments immense power – but often at the expense of the people. Gold, for all its flaws, offers stability in a world increasingly addicted to monetary quick fixes. The question isn’t whether gold should return – it’s whether we’ll survive long enough in the current system to make it a serious consideration again.
And with central banks quietly stockpiling the stuff, perhaps they already know the answer.
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