But the gold standard has its own issues. The gold standard is effectively a system of pegging all participating currencies to one another.
A dollar is X milli-ounces of gold, a Pound Stirling is Y milli-ounces.
They are effectively pegged at an X:Y ratio. But currency pegging has issues in practice, with Governments only able to keep it stable within certain limits. Outside those limits bad things will happen if you don't update the peg ratio. But when using a gold standard, if you have to adjust how much gold your unit of currency is worth, it makes people upset. If you make a dollar worth less gold people with dollars get quite upset. Also if people expect such a redenomination will be occuring, it can cause on run on the gold reserves.
Meanwhile, if you make a dollar worth more gold, you piss off anybody holding gold.
The changing of the ratio is even worse if you are using precious metal coinage that have the specified amount of gold (or silver, for the silver-standard) in them. If the ratio needs to change, now you have all this money with a face value, precious metal content mismatch.
And all this is on top of the fact by using the gold standard, the rate of gold mining can heavily impact the economy.
A dollar is X milli-ounces of gold, a Pound Stirling is Y milli-ounces.
They are effectively pegged at an X:Y ratio. But currency pegging has issues in practice, with Governments only able to keep it stable within certain limits. Outside those limits bad things will happen if you don't update the peg ratio. But when using a gold standard, if you have to adjust how much gold your unit of currency is worth, it makes people upset. If you make a dollar worth less gold people with dollars get quite upset. Also if people expect such a redenomination will be occuring, it can cause on run on the gold reserves.
Meanwhile, if you make a dollar worth more gold, you piss off anybody holding gold.
The changing of the ratio is even worse if you are using precious metal coinage that have the specified amount of gold (or silver, for the silver-standard) in them. If the ratio needs to change, now you have all this money with a face value, precious metal content mismatch.
And all this is on top of the fact by using the gold standard, the rate of gold mining can heavily impact the economy.