The gold standard refers to the earliest and most memorable arrangement in the international monetary system, which keeps a certain proportion of the exchange relationship between a country's functional currency and gold. Under the gold standard, the fluctuation of monetary units in various countries will be fixed in a narrow range, so the gold standard is also called the fixed exchange rate system.

The gold standard has existed for about 100 years. The main reasons for its collapse are:

First, the growth rate of gold production is far lower than that of commodity production, and gold cannot meet the needs of expanding commodity circulation, which greatly weakens the foundation of gold coin circulation.

Second, the distribution of gold stocks in various countries is uneven. 19 13 At the end of the year, the United States, Britain, Germany, France and Russia accounted for two-thirds of the world's gold stock. Most of the gold stocks are held by a few powerful countries, which will inevitably lead to the destruction of the free casting and free circulation of gold coins and weaken the foundation of the circulation of gold coins in other countries.

Third, when the First World War broke out, gold was concentrated by the participating countries to buy arms, and stopped exporting freely and cashing bank notes, which eventually led to the collapse of the gold standard.

Alan greenspan, former chairman of the Federal Reserve, wrote an article supporting the gold standard in the 1960s. He wrote in the article "Gold and Economic Freedom" that under the gold standard, the credit amount of a country is determined by the scale of its tangible assets; Without the gold standard system, there is no safe value storage carrier, and you can indulge in crazy credit creation almost unimpeded. Deficit expenditure is simply a conspiracy to confiscate social wealth; The gold standard will strictly restrain this deficit expenditure and play a role in protecting public property rights.