Stuff You Should Know The Gold Standard: When Money Meant Something
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Mar 3, 2026 A lively walk through the history of the gold standard and how paper money used to be redeemable for gold. They explore why gold became money, coinage quirks, and the global gold era. The collapse during wars, the Great Depression, FDR’s bold policies, Bretton Woods, and Nixon’s 1971 break get attention. The debate between gold advocates and fiat defenders closes the discussion.
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How The Gold Standard Restrains Money Creation
- The gold standard ties a nation's money supply directly to its gold reserves, preventing unlimited currency printing.
- Josh explains this forces governments to hold enough physical gold to redeem every paper unit, limiting inflationary policy.
Civil War Greenbacks Triggered Early Inflation Crisis
- The U.S. Civil War forced massive unbacked paper issuance and war bonds, causing 25% inflation during the conflict.
- Chuck and Josh recount Lincoln-era greenbacks and postwar inflation that spiked national debt from $65 million to $2.76 billion.
Golden Age Brought Global Price Stability
- From ~1871 to WWI many nations adopted gold, creating an era of international price stability and predictable trade.
- Josh highlights that gold flows between countries naturally balanced trade deficits and kept exchange rates steady.