The current debate: The return to gold and the liberalization of banking

The United States Congress established the Gold Commission in 1980 to study the question of the U.S. returning to a gold standard. Gold supporters maintain that readoption of the gold standard would stabilize U.S. prices and remedy its inflation problem. They argue that the departure from the gold standard has triggered high inflation and interest rates, low productivity, and unpredictable monetary policy. On the other hand, gold critics view any gold system as potentially damaging to the U.S. economy. They point to uncertainties in world gold supplies, inflationary expectations, and unstable market prices, as factors that could threaten U.S. economic security if the gold standard was readopted. The Gold Commission issued its recommendations on March 31,1982. Although the majority of the Commission members were not in favor of a return to gold, the issue of gold and monetary reform will continue to be a widely debated issue in the U.S. and other countries.