Would we return to the gold standard if the dollar failed?

hyperinflation, gold standard dollar colapse, cash fails gold standardQ: If the dollar fails, will we return to a gold standard?

A: The United States government and certain members of Congress are talking more and more about returning to some sort of gold standard before the dollar completely fails. Many other governments, such as China and Russia, are stockpiling gold reserves and are likely to announce the establishment of some sort of partial gold-backed currency. Some type of gold-backed currency is coming, even if it’s not the dollar.

If the United States went back to a gold standard, the new gold-backed dollar would have to account for all the fiat currency now in circulation. This type of accounting has been done numerous times throughout history and made those with precious metals very wealthy, because they held real assets vs. the funny-money that had been created out of thin air.

In a situation where gold backed all the U.S. currency now in circulation, the price of gold would need a fixes-price level in the range between $15,000 and $25,000 per ounce to account for current amount of currency that’s been printed by the Federal Reserve.

The Federal Reserve was printing close to one hundred billion dollars a month of new currency as of late 2012, further eroding the dollar and pushing the value of gold higher and higher. The more currency that is printed before the eventual accounting of dollars, the greater the value of gold will need to be—reaching far above the $15,000 to $25,000 range.