Would a Gold Standard Work?

How can we go back to a gold standard when there's not enough gold to back all of the currency?

 There is no need for an amount of gold to back the number and value of all the dollars currently in circulation. Any amount of currency backed by gold would immediately be recognized as extremely valuable. Its value can be gauged by realizing that today's price for an ounce of gold now exceeds 800 Federal Reserve dollars. Currency backed by gold would dwarf the value of the currency we are forced to use today. What is needed is a competitor--or many competitors--for the Fed dollars. Also, advocating a gold standard does not mean that gold-backed currency would be issued by a government or a quasi-government agency. The argument based on the relatively small amount of gold in the world overlooks the fact that, in the years prior to FDR taking our nation off the gold standard, a high percentage of transactions in America were compete using silver and silver-backed currency. Nor does the nation have to be committed to gold alone to back currency (although gold would be the best) because any worthwhile commodity will suffice as backing for honest currency.

- John F. McManus, President of the JBS