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Only 50 years ago our country’s currency used to operate by a different set of rules called the “Gold Standard.” The Gold standard means that a currency, such as the Dollar, is backed up by a hard commodity – in this case gold. Now, contrary to popular belief, being on the gold standard didn’t mean that every dollar in circulation was backed by a dollar’s worth of gold in reserves. In the United States, our gold standard could also have been known as the 40% Rule. The 40% Rule was simply this: that there needed to be 40% in gold reserves for whatever dollar amount was being used in circulation.

For example, if you lived in the 1950s and were walking around Brooklyn, NY with $100 in your pocket, somewhere there was $40 worth of pure gold in reserves to “back” that $100 note up. So not every single dollar was insured, but 40% was always maintained as the economy grew.

Why aren’t we using it anymore?

There are two main reasons why the U.S. moved away from and eventually abandoned the gold standard. First, shortly after the Great Depression, in 1933 then President Franklin Delano Roosevelt cut the dollar’s ties with gold. Interest rates at the time were very high in order to deter people from cashing in their deposits and subsequently depleting the gold supply. High interest rates made is hard for individuals and businesses to borrow, however. So by cutting off the dollar from the gold standard, Roosevelt could then dump more money into the economy and lower interest rates.

After this, the United States still allowed foreign countries to exchange dollars for gold, but that all changed in 1971 when President Nixon ended the practice to stop foreigners from eating into the country’s gold reserves.

What would happen if we went back to it?

The Gold Standard used to be a common way countries around the world used to ensure their currency’s stability. It helped mitigate overspending and inflation. For various reasons, over time this standard has been phased out. From a practical standpoint, adhering to the gold standard can hinder strong economic growth in today’s world. The reason for this is that the world economy grows by 2-3% each year, about a 1.5-2 trillion dollars. The amount of gold mined each year worldwide is only 2500 metric tons or $128 billion.

As you can see, this is a large shortfall if trying to adhere to the gold standard. Going back would see our economy and many others around the world stop growing at their current rate, meaning less production, trade, job growth, and wealth distribution. Since breaking free from the gold standard, we’ve made it almost impossible to go back.

You can still Get Cash for Gold

Although the dollars in your pocket may not be backed by the yellow stuff, gold as a commodity has only seen its value rise over the last decade. If you’re trying to cash in on old gold jewelry, gold watches, or coins for extra cash – there’s no time like the present. Gold Unlimited’s cash for gold program offers you top dollar for your gold items. Come in and see how much you could walk out with.

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:Sources:

http://openmarkets.cmegroup.com/4510/what-would-a-return-to-the-gold-standard-mean

http://en.wikipedia.org/wiki/Gross_world_product

http://mentalfloss.com/article/12715/why-did-us-abandon-gold-standard

http://www.dailyfinance.com/2012/08/30/gold-standard-return-how-it-affects-you/

Time McClendon is a world-renowned jewelry designer and sculptor who uses wire and metallic elements to produce his artwork. Each piece produced by McClendon is absolutely breathtaking and one-of-a-kind.

Mr. McClendon has developed the remarkable skill, talent and ability to make one of a kind art and jewelry with wire and Swarovski crystals. With no formal training, Mr. McClendon began creating when he was 8 years old and has never stopped. “I started like most kids do sketching and drawing,” he says. “I started working with steel wire; it’s like drawing. I started in the late 70s and early 80s. I made wire heads, squirrels, and dogs.”

Time has since moved on to focus on jewelry and sculpture. He designs everything from rings, bracelets, and earrings to hats! It’s amazing to see a sole artist doing what they love and producing meaningful work that’s also valuable!

Come into Gold Unlimited and find the unique!

At Gold Unlimited we buy and sell custom jewelry, gemstones, and fine metal-work. We’ve been a part of San Antonio for over two decades and have one of the most diverse inventories and showcases around. Come in today and we’ll help you find your next unique piece!

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Dive deep inside a modern gold mine in Nevada and see what it takes to capture a handful of that shiny stuff!Continue reading

Recap

1. Make sure you separate your gold out by carats (14k, 24k, etc.)

2. If there are precious gems on the gold, make sure they are evaluated separately.

3. Get an independent appraisal apart from your buyer.

4.  Document everything. You don’t want it to become a case of he-said-she-said.

5. Read the fine print before you sign anything.

For those of us that own fine jewelry, precious metals, or gemstones, we know that what we own is valuable, but we may not always be aware that value can change over time. That investment you made a decade or so ago may have appreciated over time.Continue reading