Gold Standard vs. Fiat Currency: Is 2% Growth Better Than 4%?

We're constantly told that higher economic growth is the ultimate goal. But is a 3-4% growth rate under a fiat currency system really better than a slower, more stable 2% growth backed by physical gold? In this video, we dive deep into one of the most fundamental debates in economics.

Under a gold standard, the growth of the money supply is limited by the rate of gold mining (around 1.5%) plus productivity gains, totaling about 2% annual growth. By contrast, modern fiat systems can create money at will, often leading to higher nominal growth rates of 3-4% or more.

On the surface, 4% beats 2%. But is it that simple? Join us as we explore:

🔹 The Nature of Growth: What's the real difference between growth generated by production (gold standard) versus growth stimulated by credit and money creation (fiat)?
🔹 Inflation's Hidden Tax: Does the higher growth in a fiat system come at the cost of your purchasing power? We break down how inflation impacts long-term wealth.
🔹 Stability vs. Flexibility: We analyze the trade-offs between gold's price stability and fiat's flexibility for governments and central banks to manage economic crises.
🔹 The Historical Argument: Why did we abandon the gold standard, and what have the consequences been?

Is the pursuit of higher growth numbers blinding us to the long-term risks of currency debasement and boom-bust cycles? Or is the gold standard an outdated relic that would stifle a modern global economy?

Let us know your thoughts in the comments below! Which system do you believe is better for long-term prosperity?

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Connect with Alasdair Macleod:
https://x.com/MacleodFinance
https://substack.com/@macleodfinance
@AsGoodAsGoldAustralia