Return to the Gold Standard?

At a time when governments are madly printing money to pay off their debts, the Adam Smith Institute blog asks whether we should protect ourselves against inflation by returning to the gold standard. Dr. Eammon Butler, the Institute’s director, says ‘no’: “Now a lot of people have casually dismissed a gold standard on the grounds that there just isn’t enough gold. I always thought that was nonsense. Sure, on my calculations you would need to weigh out about one ten-thousandth of an ounce of gold to buy a pint of milk, which isn’t a very practicable way of doing your shopping. But there’s an obvious answer: you issue paper certificates for such tiny quantities of the gold, and use them as your currency. The paper works because, well, it’s as good as gold.”