[Analysis of the Economic Impact of Fixed Gold]
I. The Impact on the Monetary System and Economic Policy
1. Deflation Becomes the Norm
Rigid Money Supply: The total amount of gold grows slowly (annual mining volume of about 3,800 tons, with a global stock of only 210,000 tons). If currency issuance is strictly anchored to gold and cannot be flexibly adjusted according to economic demand, it will lead to long-term deflation. For example, during the gold standard period of the 19th century, prices fell by an average of 1%-2% per year, exacerbating the debt crisis.
Ineffective Policy Tools: Central banks lose the ability to adjust the economy through interest rates and quantitative easing. During the 2008 financial crisis, countries relied on increasing money supply to stabilize the market; if returning to the gold standard, similar crises could evolve into a Great Depression.
2. Comprehensive Debt Crisis Erupts
Violent De-leveraging: Current global debt reaches $318 trillion (328% of GDP). Under fixed gold, the real cost of debt repayment soars due to deflation, making government, corporate, and individual defaults inevitable. The direct trigger for the collapse of the gold standard in the 1930s was the vicious spiral of debt.