## Gold Is Quietly Reclaiming Its Place on the Global Currency Stage

The most controversial monetary system in contemporary financial history is experiencing a silent revival. Increasing signs indicate that central banks and market participants around the world are re-examining the gold standard, which was once widely dismissed. This is not a sudden shift but an inevitable process driven by deep economic logic and real-world challenges.

### The Political Roots of the Gold Standard's Demise

To understand why the gold standard was abandoned, we need to look back to the 1930s. At that time, Franklin Roosevelt faced the impact of the Great Depression, and the Federal Reserve required banks to hold enough gold to support at least 40% of circulating paper currency. With gold reserves nearing the limit, this became an "obstacle" to government expansion of the money supply.

Roosevelt's solution was to confiscate private gold and raise the official price from $20.67 per ounce to $35. This move caused the gold value on the Federal Reserve's balance sheet to surge by 69%. In this way, the central bank gained more room to print money. By 1972, President Nixon completely severed the last link between the dollar and gold.

**Essentially, abandoning the gold standard was a government choice to expand power.** The gold standard limited money creation, which constrained the pursuit of continuous political expansion. The U.S. economy, linked to gold for 180 years, achieved the greatest long-term growth in human history without severe inflation. But since the dollar was decoupled from gold, the average growth rate of the U.S. economy has decreased by about one-third—this "cost" is ultimately borne by ordinary households.

### Out-of-Control Debt and Currency Confidence Crisis

The fiat currency system unleashed government spending impulses, with consequences gradually emerging. Global debt has ballooned to $300 trillion, three times the world's gross domestic product. U.S. domestic debt has also hit record highs, with much of the economic growth over the past 18 months driven by credit card consumption.

It is this unsustainable debt expansion that has begun to prompt countries to reconsider the stability of their monetary foundations.

### Signals Behind the Central Bank Gold Buying Frenzy

The most direct change is reflected in central banks' gold purchasing behavior. In 2022, global central bank net gold purchases reached 1,136 tons, the highest since 1950. In 2023, this momentum continued, with net gold purchases reaching 1,037 tons—marking the second consecutive year that central banks bought over 1,000 tons.

Leading this wave of acquisitions are emerging market central banks from China, India, Russia, Turkey, and others. Their actions reflect a deep skepticism about the long-term value of the dollar and a practical need to establish an alternative monetary system.

### Monetary Experiments in Emerging Economies

The actions of the BRICS countries are particularly noteworthy. This group has expanded from the original five (Brazil, Russia, India, China, South Africa) to a ten-nation group by 2024, with over 40 other countries applying to join. BRICS is exploring the creation of an alternative payment system and simultaneously weakening the dollar's dominance in global trade.

India has even begun experimenting with issuing government bonds backed by gold. Even Zimbabwe, plagued by hyperinflation, is turning to gold as a reserve asset. Although these initiatives are currently limited in scale, they reflect a clear trend—markets are shifting away from the dollar toward assets with intrinsic value, and gold is the most logical choice.

### The Role of Cryptocurrency

The continued rise of the cryptocurrency market is also an important signal. This widespread interest in digital assets fundamentally represents a market exploring and seeking alternatives amid the declining reliability of fiat currencies.

### Economic Effects of a Return to the Gold Standard

If the world indeed shifts to a gold-backed monetary system, the economic consequences will be profound. First, gold prices will face enormous upward pressure. Financial analyst Jim Rickards' calculations suggest that to fully support the global monetary system with gold, the price might need to stabilize around $27,000 per ounce—several times higher than current levels.

Second, the revival of the gold standard will inevitably face significant resistance, especially from political and financial institutions that rely on unlimited money creation. However, the logic of history is always dictated by economic realities: when fiat systems face a crisis of confidence, some objective measure of value is necessary to restore order. Gold has served as a monetary role for 5,000 years, and its return to this role is an inevitable, not accidental, development.

Ultimately, economic logic and market forces will always overcome political resistance. The resurgence of the gold standard is not a nostalgic idealism but a necessary response to current crises.