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Welcome to Stuff You Should Know, a production of iHeartRadio.
Hey and welcome to the podcast.
I'm Josh and there's Chuck.
And it's just us here today to explain something that every person in the world should know about.
The gold standard.
I have an intro.
I have an intro.
Hold on.
Oh God.
Chuck.
Yes.
Have you ever gone to a bank and traded a dollar in for actual gold?
No, I've never even seen gold in person.
That wasn't, like you know, on a whatever, a ring or something.
Sure.
And that is a huge use for gold.
I've never seen nuggets or bars, ingots.
I haven't either.
I have never even seen a gold coin now that I think about it.
I don't think I have either.
But there was a point in time where you could see gold anytime you wanted, if you went to your bank and you took a certain amount of dollars or pounds or francs or pesos.
Because countries all over the world were on what's known as the gold standard.
And just a quick broad stroke example explanation, I guess, is that on a gold standard, every single one of your dollars or pesos or francs or Deutschmarks are redeemable for gold.
Which means that you have to have an equal amount of gold in your country in safes, in vaults, to cover every single dollar or peso or Deutschmark or franc out there.
You can't just keep printing money.
You can only print as much money as can cover the amount of gold that you have.
Yeah.
Which is, you know, it's sort of a public safeguard to say hey, your dollar, your paper money or your coins are worth something, because it's worth this.
Much of this other thing that we've also agreed is worth money.
Exactly.
And so for you, if you're walking around in a country that's on the gold standard, you can go trade your dollars in for gold, your paper currency in for gold, right.
It also gives you a lot of stability and understanding that when you wake up in the morning, what you bought for 1 yesterday, you're going to be able to buy for 1 today.
Prices don't fluctuate very much on the gold standard.
And then on more of a macro level, If you're a country and you're importing tons of stuff, that means your currency is going out.
You're using your currency to buy these imports.
And when a bunch of your currency is out there, you need it back home.
So you have to use some of that gold to buy your currency back.
So the upshot of all of this is the gold standard is very different from the type of currency that we have today.
And I feel like we should maybe explain a little more eventually about how they're different.
Yeah, for sure.
I mean, we've been back and forth between the gold standard and the other, which we call fiat currency, which is a Latin term.
And that fiat currency basically, is what we're working with now, because the gold standard is basically dead.
But that's where you can.
You know where you have more monetary policy guiding the markets and stuff like that rather than like no, it's like it's tied to gold, like kind of end of story.
Yeah, there are people that love and you know we're going to talk about sort of the benefits and the arguments for and against.
But people that are into the gold standard as an idea.
They're kind of out of luck, but they're still around.
They're called gold bugs.
They've been called that since Edgar Allen Poe's story.
That's where it came from, about the search for buried treasure.
But you know it's still a fight in some circles from people who are like way into the gold standard.
Yeah.
And there's I mean, they have a lot of good points.
But the problem is, is that that train has left the station and it's not coming back.
Not coming back.
So why gold, right?
There's all sorts.
You could peg your currency to wheat, right?
And you could take your dollar bill and go into the bank and they'll give you like a bushel of wheat in return, right?
Why gold in particular?
Well, yeah, I said that, you know, that's something that they all agreed was worth something.
And that's kind of the deal.
Like something's only worth something if everyone agrees that it's worth something.
Right.
But you can't, you know, you've got to pick something that makes sense.
And gold has always made a lot of sense for a lot of reasons.
It is.
It's scarce, but not like rare rare.
It's rare enough to be precious, but not so rare that, like you know, it's impossible to find.
So you gotta have enough of it, but not too much of the thing It's.
Also you can divide it up into small things, you can melt it down, you can make it into stuff making it into coins, you know is certainly valuable.
It's malleable, it's resistant to being corroded and, like rusted, it's durable.
So all that stuff makes it just sort of a valuable thing to trade.
Yeah.
And you said it's durable.
Like most of the gold that's ever been mined in the history of humanity, is still around because you can change it from one form to another, say like from a necklace into a gold coin.
But there's still that same amount of gold on Earth.
Yeah.
And I guess, as of 2025, I think.
The World Gold Council says that 219890 tons of gold have been mined throughout history.
And about two-thirds of those have been mined since 1950 alone.
Right.
And most of that is still around.
Like you said, it's still out there, which kind of proves that gold was a pretty good pick, that and silver.
I mean silver was.
We'll talk about the fact that gold and silver kind of went back and forth over the years.
There's just a lot more silver.
So silver has just been worth less.
Right.
But it's still worthwhile.
And in fact, if we're going to start to go back a little bit in history, the very first, I guess, currency that the United States came up with, and the history for Great Britain tracks very similarly.
But in the U.S., they said we're going to use gold and silver for coinage.
And they had to set an amount.
How much silver do you need to buy one unit of gold?
Because they are related to one another.
You're using both for currency.
So they said, you know what, 15 pieces of silver, grains I think, is equal to one grain of gold.
Yeah.
So like a 15 to 1 ratio.
But they realize right away that if they're going to start setting these ratios and these sort of units as being kind of blocked in, it's just going to create a lot of trouble over time, especially when the amount of gold and silver increases.
Well, I guess not so much decrease, but when there's a gold rush or when they find a new vein of silver somewhere, that changes the amount of gold and silver in the world.
But they still had locked into that 15 to one ratio.
It's not like they kept changing it over and over.
So I think kind of right away, people were like, oh, wait a minute.
This is all a little bit artificial in a way.
Yeah, and that's something that gold bugs have trouble with is that it doesn't really matter how honest a gold standard keeps the government.
It's still all artificial.
There's still manipulation that can happen.
Right.
And yeah, when a bunch of gold comes on the market, gold becomes less valuable.
If a bunch of silver comes on the market relative to gold, silver becomes less valuable.
And one of the problems with using a commodity to back your currency is that sometimes the value of the commodity can rise beyond the face value of the currency.
So if you have a 10 gold piece and the price of gold actually puts that one ounce at 20, you're not going to go spend that 10.
You're going to melt that thing down or sell it to somebody for $20.
So there's problems here with money that actually means something in the world.
Right.
Yeah, for sure.
And that happened.
And when that happened kind of the first time I guess, for the United States people started doing that.
They started melting gold coins or keeping them and hoarding gold coins.
And they started trading and using silver as currency.
So all of a sudden we were like, wait a minute, we thought we were on a gold or we are heading toward a gold standard.
And now we're kind of on a de facto silver standard because that's what people are using.
Yeah.
So the government was like, well, let's just make this 16 to 1.
And it brought everything a little bit more into parity.
Then there was the minor 49er gold rush in California.
And then there was also another gold rush in Australia about the same time.
So the market price for gold went down again because the supply increased, which basically made the US government throw their hands up in the air and say we give up.
We're going to go watch football again.
Yeah, their kind of football.
I guess over across the pond Isaac Newton finished out his long, storied career as the master of the mint.
He did a lot of other stuff, obviously, before that.
But he worked as the master of the mint at the end of his life until his death.
And he was...
He was all about gold.
He was like he encouraged overvaluing it and said we should really just set gold as the gold standard for England.
And they adopted that in what, like 1819.
Yeah.
So I think they were the first country on an actual gold standard.
And then it kind of spread around Europe from there because they're like hey, this is actually a pretty good idea.
Because you don't need necessarily a central bank.
You don't have to have somebody figuring out what lever to pull or whatever.
The gold actually kind of naturally flows from one place to another.
Yeah.
To basically keep this homeostasis, this balance, throughout the world, among all the countries that are on the gold standard right.
Yeah.
So the thing is, is humans are humans.
You can mess up anything.
Even something that naturally flows from one place to another.
We can basically put our foot in it and screw it up.
Yeah.
And that was the case usually, as we'll see throughout history.
That's usually the case when war comes along.
And that happened in the United States with the Civil War.
And we've talked many times about this, about how, before the Civil War, there was like 8000 different types of currency in use in the United States.
Like your general store in town might have its own currency that you could use.
And as the Civil War came along, that all changed very quickly.
Yeah, that was, I remember we, that feels like very many years ago.
Yeah.
We were talking about that in a few episodes.
It was kind of the hot topic for us for a while.
It was so hot.
We were talking about all those different currencies, like one town might have a currency and then two miles down the road, the next town might have their own currency.
Mm-hmm.
Which you know within that town as long as every – again, if everyone agrees what something is worth, it's working out okay.
But that's a mess if you're trying to be a country which we – despite the Civil War, we were trying to be a country.
Right.
And so –
The Civil War starts and the federal government was like hey, like you know, Josh Clark will say one day wars are expensive.
And so they issued war bonds, I think about half of five hundred billion dollars in war bonds.
War bonds are what you buy to basically you know, or you sell as a government and people buy to kind of finance the world and saying hey, I'll loan you money to go fight this war because that bond is insured.
I know for a fact that eventually I'm going to get repaid with interest for lending you that money to fight this war.
So it's like it's super safe on the investor side, but it's just a long term payout.
Yeah.
The thing is, is when they issued those, as far as I know, they weren't backed with gold.
And then they went even further.
They just started issuing straight up paper currency that had it wasn't pegged to gold or silver or backed up by any of it.
It was the first fiat currency in the United States.
And fiat, like you said, is just basically the government saying this has value.
Because we say it has value.
You can use this to buy stuff.
You can use this to pay your taxes.
It is currency, even though it's not backed by anything.
The reason they did that is because it was so expensive.
They literally had to print money, say it had worth and then start using it to pay their debts, to basically fight this war.
The United States just became flooded with all of this paper currency.
The paper currency plus all the gold-backed currency just became less and less valuable.
And I think the inflation that came about after the Civil War, because inflation happens when the value of your currency is weak, because there's too much of it out there.
It was at like 25% during the Civil War.
And just for a reference, in 2022, at the peak of the most recent inflation in June, it was at 9%.
And that was pretty uncomfortable.
I can't imagine 25%.
No, we were in a pretty bad way.
And this was also a time when the country started dabbling in national debt and saying like hey like, as a country, we can go into deep debt.
Yeah.
And like, let's let's see if anybody really cares.
It went.
This is these are pretty staggering numbers.
The national debt in 1860 was 65 million.
Six years later, it was two point seven six billion dollars.
Yeah.
And this is when gold standard or what are they called?
Gold bugs.
Yeah, started saying hey um, i think you've just proved our point.
Like you printed all this money uh, this fiat currency, and we're in real trouble now, yeah.
And so lincoln says hold on, hold on.
And he rolls up his sleeves a little bit and gets to work, spits in his hand, rubs them together, picks up an axe for no reason, just to kind of look tough.
Yeah, sure it works.
And he says we're going to take all of the bills out there, all the dollars on the market, and just take them back and start destroying them.
Yeah.
And by doing that, we're going to actually lower the supply of dollars, which increases their value right.
Yeah.
And so problem solved.
That's going to fight inflation.
Because the dollar is stronger again, because there's less dollars on there.
And on just a basic economic basis of supply and demand, it makes sense.
But what the government didn't realize all the way back in the 1860s is that it takes a little more finesse than that to not just screw up the economy like a pendulum from one problem to the opposite problem.
Yeah.
Like can you imagine being a citizen of the United States back then, in those early days when they're just trying to figure this stuff out?
And, you know, I bet a lot of people didn't have a real understanding of this.
But if you did, could you imagine just seeing your country be like hey, let's print a bunch of paper and say it's really valuable.
Right.
And then, when they got in trouble, be like hey, let's burn all that stuff that we printed and said was valuable.
Yeah.
Like they would just come up behind, like congressmen would come up behind people counting their money and just yank it out of their hand and run off.
And you couldn't do anything about it.
Yeah.
Paper footballs.
That was a real hot item at the time.
So okay, a bunch of bills, a bunch of money just gets taken back burned destroyed, taken off of the market.
It's just not there anymore.
And the value of the dollar strengthens.
The problem is, because the dollar is worth more than it was before and seems like it's just gonna keep going up in value, people are like well, I'm gonna hang on to my dollar because it's going to increase in value, so I'll be able to buy more later.
The problem is in the current term, that means that people aren't out buying stuff.
And if you're making say, pre-industrial televisions, which were just boxes, that you know like somebody with a puppet could get in and make a little show, but they called them TVs back then.
If you're making those and people are not spending money on the pre-industrial televisions, you're.
Profits are going to start to go down.
You have less reason to produce more and more of those, which means you need less workers, which means you start laying people off, which means those workers have less wages to spend money on.
And the whole thing becomes this self-feeding cycle that just gets worse and worse and worse.
And we call them recessions.
And when they're really bad, we call them depressions.
And that happened from the government soaking up all of those bills after the Civil War.
And it caused what's called the Long Depression from 1873 to 1879.
Yeah.
And some say it almost went to like 1900, like 1897, before we were fully out of that.
And it was a real...
Like, I think it was a real wake up call early on to the United States of like, hey, you can't.
There's got to be a better way than just printing a bunch of money when you think you need it.
Like kind of artificially manipulating the value of the dollar, like that is only going to lead to trouble.
So, boy, that's a great first act, I think.
I think so, too.
Back in form after vacation.
Yeah.
Yeah.
Yeah, I feel pretty good.
Okay, you feeling good?
Yeah, and you're doing great.
You're looking sharp, man.
I appreciate it.
So let's take a break, and we'll come back, and we'll talk about the golden age.
We love our golden ages.
The golden age of the gold standard, right after this.
We went from normal life, healthy child to acute lymphoblastic leukemia or B cell, ALL.
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In 2023, a story gripped the UK, evoking horror and disbelief.
The nurse who should have been in charge of caring for tiny babies is now the most prolific child killer in modern British history.
Everyone thought they knew how it ended.
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Lucy Letby has been found guilty.
But what if we didn't get the whole story?
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So the United States is basically just stepping in it and then stepping out of it and stepping in another pile of it in the 1870s.
We're not talking about gold either, right?
No.
No.
No.
I couldn't come up with something that wasn't just absolutely gross.
So I'll keep moving on.
But this was the time when the world was globalizing for kind of the first time.
And so other countries are taking note of this and they're like yeah, this gold standard might be a good thing.
And, like you said, it kicked off a golden age from 1871 to basically through about to World War I.
It was a golden age for gold.
There's no other way to put it.
I didn't want to say that, but there's no other way to put it.
Yeah, it was like, what, 40-something years ago.
Where everyone was sort of agreeing that the gold standard was the place to be, because there was debate like after the mess, you know, post-Civil War, of like what we're even allowed to do as a country and like can the government even print money?
Like that.
The Supreme Court came along in 1871.
They said, yes, they can print money.
Maybe they need to, you know, we need to rethink our process.
But the government printing money is okay.
Yeah, it's constitutional.
It's legal.
Yeah.
Yeah.
Apparently the Wizard of Oz, and I'm sure we've mentioned this before, but it was supposed to be an allegory for this debate over whether to go with the greenbacks Emerald City, go with the gold standard the Yellow Brick Road or to go with the ruby standard, which were the slippers?
Yeah.
Right.
Or wheat, like you suggested, that would be the scarecrow.
Exactly.
Yeah.
So all of those scarecrow rubies gold, the greenbacks, all of those were part of this national debate.
And finally it was settled in 1900, when William McKinley was elected, made present and he said no, it's gold.
We're just going with gold.
And even more than that, you cannot print a dollar beyond the amount of gold we have to back it up.
Yeah, that was key to that whole declaration.
He was a pro-gold candidate, pro-gold standard.
And like you said, in 1900 when he won, he was like, we got to have some real teeth behind this.
I can't just say it as president and make it so.
So they passed the Gold Standard Act of 1900, and that had some language in there that said –
Exactly that is, hey, that circulation, it's got to be tied to gold.
We can't print one dollar more than we have in equal amounts of gold.
And that was it.
You know, that was the classic gold standard period.
It meant that nations were trading with one another on equal ground.
And it was dependent on sending like physical gold to one another.
If you were producing more and exporting more, then you had a lot of gold stockpiled in your country.
If you had a trade deficit, you had a lot less gold.
And everyone kind of knew what that meant.
And it worked for a long time.
It did work.
I mean, there were dozens of nations all on the gold standard at the same time.
So you knew how much you were going to get paid for your shipment of pre-industrial televisions overseas, right.
Because they were bonkers for them in Portugal.
Yeah.
But the reason why you knew is because there was such stability among your currency and international currency, pegged to gold, that when you ship that shipment out, by the time it arrived it was the same price.
With fiat currency the price of stuff can fluctuate so much over a day or a week that when you send a shipment out, if you hadn't already settled the contract which you probably did but by the time it arrived you might be making way less than you were going to when you shipped it out.
That's not really what happened during the classic golden age of the gold standard.
It was all much more stable than that.
That's right.
But, like you said, we pegged the end of that to basically World War I because, as you mentioned earlier, wars are really expensive.
They're going to spike your national debt if you get involved in one.
And in Europe and World War One, they were like, this war is really, really expensive.
And our supply of gold is being constrained.
So we have to we we have to leave it.
So the international gold standard dissolved, basically.
Mostly worldwide, except for the U.S. and U.K.
We stayed on that gold standard.
And because of that, for for a while the, the British pound and the US dollar were basically the global reserve currencies, because you know they had gold to back them.
So they were they were the gold standard, the dollar and the pound.
Yeah, because it's not.
I mean, it's not figurative when you're saying like you had to use your gold to buy back your currency if you were in a trade deficit, right?
You actually had to ship gold to the country you were buying your dollars or your pounds back from.
Yeah.
So, with the US and the UK having currencies pegged to gold and them being the global reserve currency, you could just ship currency overseas, which is so much easier than shipping gold.
Right.
So that was a huge lighter.
It is super light.
So the US and England both ended up with, like the vast majority of the world's gold, because you know you could take a dollar or you could take a pound to the US or the UK and say give me some gold for this.
And those notes, those paper dollars, were good as gold essentially, which is I'm pretty sure where that came from.
Yeah.
I mean it's funny, the gold standard and good as gold, like a lot of these terms like literally come from this, these weird monetary policies.
Yeah.
Yeah.
William McKinley.
Yeah.
Old gold, gold back.
Mm hmm.
So things were going along OK after that.
And then the 1929 stock market crash came and banks started failing all over the world.
And everyone, you know, those you know, when stuff like this happens, there's.
It seems like it used to happen more, but there can be a real panic and people start converting their dollars and their pounds to gold because they were, like we know, gold is worth something.
I don't want to have, like this, this paper currency on hand.
That's like clearly losing value very quickly.
Right.
If I wait a day, I might get less gold than I will if I cash my bank account in today.
And remember earlier I said like how this is all it all kind of self-regulates.
It all moves naturally from one place to another.
But still humans can screw things up just because we're human.
This is how we screwed it up.
There were banking panics after banking panics, where people just made runs on banks and said give me all my money.
And the bank would be like, we don't have it.
They would shell out all their money and end up closing.
And there were like 10,000 bank closures in the early 1930s in the United States alone.
Between 1930 and 1932. because people would run in and just take all their money out.
And so banks were failing.
This was before the FDIC.
So if you had a bunch of money and the bank closed forever before you could cash it in, you were broke.
Like that money was worthless, right?
And that caused even more people to make runs on banks, which created this huge, terrible ripple effect.
And so the UK and the US were both faced with this challenge.
Like, what do you do?
Do you stay on the gold standard or do you go off the gold standard?
And the UK was up first.
Yeah, they abandoned the gold standard in 1931.
Apparently, there's a story that their central banker, a guy named Montague Norman at the time, suffered a nervous breakdown because he was, you know.
It's kind of up to him to make that final call.
Yeah.
And can you imagine the pressure to be in charge of like a kind of a worldwide economy almost?
Right.
And how important these decisions are.
Wait, wait, I want to answer your question.
No, no, I cannot imagine that kind of pressure.
You can't either.
So the pounds value, of course, immediately drops even further than it already was.
So people that were had lost faith in the paper money were saying like, see there, like good thing, we traded in our pounds for gold.
And America and, of course, everywhere around the world is seeing this happen.
So everyone else is losing confidence.
And this is when, you know, further runs on banks happened.
And we had a president, a lame duck named Herbert Hoover, who was leaving office in 1933 and told incoming FDR.
He was like hey, you know, we're in real trouble here.
The reason we have gold is because we can't trust governments.
And FDR was like, you know what?
I think I've got this.
So he went in office and he said, I'm going to I'm going to fix this crisis for good.
Yeah.
One of the first things he did was, I think, the day after he was inaugurated, he declared a four day banking holiday.
So all the banks were closed for four days.
So there couldn't be any runs on banks.
And I was watching this.
There's this dude who's a YouTuber named The Casual Historian.
And he bills himself as a conservatarian, which I take to be in a combination of a conservative and a vegetarian.
Right.
Yeah, probably.
But he was explaining that this actually didn't do much in real terms, like the banks that were about to fail before the banking holiday still failed afterward.
But as far as the public was concerned, it was a huge signal for essentially the first time that the government was going to step in.
Because one thing that you cannot argue against with the gold standard is because you're constrained you cannot print more money than you have gold to back it.
There is nothing you can do in an economic crisis except sit there and watch it happen.
You can't do anything.
There's no levers for you to pull to pull the country out of it.
The only way that you can pull your country out of a recession or a depression is is by printing more money and actually devaluing the money that people are hoarding.
So you're basically saying you got all this money that you stashed away because it's so valuable.
Well, guess what?
It's not so valuable anymore.
So you might as well get out there and spend it.
Yeah, for sure.
And, you know, we were in big trouble, obviously, in the 1930s.
You know you mentioned earlier sort of that cycle that happens when companies are producing less and fewer customers and not hiring people or firing people.
And in 1933, the unemployment in the United States was 25 percent.
That's so crazy.
I know it's staggering.
And I think worldwide, almost one in three people were out of work in 1932.
So it wasn't just the United States, like that many people being out at work at once.
And that's the thing that I always, you know, thankfully, it hasn't happened yet.
But with the AI conversations and people, I've had conversations with people in my sphere.
Are you sure they were people and not bots?
They think it's such a great thing.
And I was like, you know, I'm not even arguing the merits of art or not and things like that.
But I said, I just worry about what would happen if like 20 of the workforce was laid off in the span of like a year or so because of AI.
It's like, that's what I worry about.
And we haven't seen that yet, thankfully, but I guess we'll see.
Yeah, Yumi and I were talking about the same thing and she brought up a really great question which is like one of the things that a lot of the AI proponents say is like eventually we're going to create this utopia where like, no one has to work and everybody's wealthy.
And her question is like if that's your goal, why don't we take some of that wealth and just start now, before AI?
Why do we have to wait for AI to do that?
We can do it now.
I thought that was rather clever.
I stood up and clapped and went, whoo.
Right.
And she was like, that's weird.
We're in our living room.
She left the room.
All right.
So things are bad.
They had that banking holiday.
So Congress passes what's called the Emergency Banking Act at the time, which basically, like you said, allowed them to, in an emergency issue, just start printing money.
Basically, that's not pegged to the gold standard.
And but we had that gold standard because the Gold Standard Act of 1900.
So they had to create this banking act, I guess, to work around that.
Right.
Yeah.
They basically said OK, this is just emergency measures and we're just printing this money to give to banks to keep them from going under.
So the government is signaling all over the place.
We're stepping in.
We're going to make sure that this, that like we're going to do something about this for the first time.
I think that was my point before I got off on the tangent for a little while a minute ago.
But the government is signaling all over the place that they're going to back up banks, so you don't have to run and get all of your money out and just keep making this whole thing worse.
So that was like a first step.
But the problem is, is there was still plenty of gold out there that people were hoarding.
They were like yeah, that's great, thanks a lot, but I'm not taking this gold back to the bank right now because I don't have any confidence in the banking system.
So the government figured out how to deal with this.
They said, well, you know what?
We will put you in jail for 10 years and fine you the modern equivalent of 250000 if you don't give us your gold.
We'll give you the equal amount of paper dollars back, but you can't legally own gold anymore.
Yeah.
And that was it.
That was.
I mean, I think it was about a month after they sort of restored that public confidence with the Emergency Banking Act.
Like FDR was moving very quickly and said, all right, we're suspending the gold standard officially.
And then the next year was that Gold Reserve Act of 1934 that you were talking about, where they were like yeah, you can't, I mean you can keep your rings.
And if you got like collectible coins and stuff, we're not coming after those.
But you can't have bars of gold in a safe in your house anymore.
Yeah, and Jimmy the Greek was like, whew, that was close.
So yes, so now you had to have, you had to use paper currency.
So this was the shift in the United States and this had already happened in other countries, like you said, especially in Europe after World War I, And the gold standard was dead.
And one of the things that demonstrated the death of the gold standard was economists generally today say that the US being able to print money And basically kickstart inflation to pull us out of the deflationary spiral, aka the depression.
That's basically 90 percent of the reason that the U.S. got out of the Great Depression.
It was leaving the gold standard being able to print money, because if you can just print money and take money off the market and put more money on the market when you need it, you can adjust the economy enough to get it out of crises one way or the other.
And that's actually the better way of doing it.
And so the gold standard never came back again.
That's right.
And so that could be the end of our show.
But that would be weird because we haven't had our second ad break yet.
So we're going to do that and we're going to come back and just say see you later and read a listener mail, right?
Because the gold standard's gone forever.
Gone forever.
All right.
We'll be right back.
We went from normal life, healthy child to acute lymphoblastic leukemia or B-cell ALL.
The St.
Jude team came up to get CJ via ambulance.
Shortly after that, I noticed a rainbow.
It meant that there was hope.
We were driving into hope.
To have hope is to have your child healthy and we have that because of St.
Jude.
You can help kids fight childhood cancer.
Please become a St.
Jude Partner in Hope today by visiting musicgives.org.
In 2023, a story gripped the UK, evoking horror and disbelief.
The nurse who should have been in charge of caring for tiny babies is now the most prolific child killer in modern British history.
Everyone thought they knew how it ended.
A verdict?
A villain?
A nurse named Lucy Letby.
Lucy Letby has been found guilty.
But what if we didn't get the whole story?
The moment you look at the whole picture, the case collapses.
I'm Amanda Knox and in the new podcast Doubt, The Case of Lucy Lettby, we follow the evidence and hear from the people that lived it to ask what really happened when the world decided who Lucy Lettby was.
No voicing of any skepticism or doubt.
It'll cause so much harm at every single level if the British establishment of this is wrong.
Listen to Doubt, The Case of Lucy Letbe on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
China's Ministry of State Security is one of the most mysterious and powerful spy agencies in the world.
But in 2017, the FBI got inside.
This is Special Agent Regal, Special Agent Bradley Hall.
This MSS officer has no idea the U.S. government is on to him.
But the FBI has his chats, texts, emails, even his personal diary.
Hear how they got it on the 6th Bureau podcast.
I now have several terabytes of an MSS officer, no doubt, no question, of his life.
And that's a unicorn.
No one had ever seen anything like that.
It was unbelievable.
This is a story of the inner workings of the MSS and how one man's ambition and mistakes opened its vault of secrets.
Listen to The Sixth Bureau on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts.
Okay, we're back here for Act 3, which means it's time for listener mail, because the gold standard is dead.
This is where the golden gun goes off.
That's right, because no, the gold standard is not dead.
It actually had another sort of brief, not even stint, like it kind of had a maybe not a golden age, but maybe a heyday.
When the Bretton Woods Agreement came around, which was a UN, a United Nations agreement that came around in 1944 in Bretton Woods, New Hampshire.
That had a whole brand new system.
That was really kind of like that original gold standard with 44 countries.
A country signed on along with the US, that said all right.
The US dollar now is pegged to gold at 35 an ounce.
And everybody else that's signing on is tying their currency to our dollar.
Right.
So there's a fixed rate, like there's 15 pesos for one dollar and one dollar equals this much gold.
So it's essentially the world going back on a gold standard.
They just figured out a good way around it to make it much easier.
Right.
And again, just like the first time, if everybody's playing by the rules, then this keeps you from monkeying with interest rates to make your exports more attractive.
It prevents trade wars.
It does all sorts of calm, peaceful stuff.
But the problem is there's just and this is the same problem today.
There just wasn't enough gold in the world to cover the increasing expense of modern life.
Yeah, for sure.
And they had put things in place because, you know, they were a little smarter this time around.
They were like, all right, we'll create the International Monetary Fund.
We'll create the World Bank.
So that means that there's their official worldwide bodies kind of coordinating this monetary policy between all the countries to make sure that no one's doing hinky stuff.
And it took a long time.
This wasn't like, you know, they reached this agreement in 1944.
And by 1945, it was all set in stone.
I think it didn't actually take effect till 14 years later in 1958.
By the 1960s, like shortly thereafter, the US was was spending like a like a drunk 10 year old.
Military spending was in foreign aid.
We're all just like ramping up spending on imports for an investment.
There are a lot of dollars from the United States in worldwide circulation.
Yeah.
And even though we held a lot of the world's gold reserves like 75 at the time, like you said, we still didn't have enough gold to cover all that kind of money.
No.
And this is what keeps governments honest.
There is a possibility of a worst-case scenario where all of the people holding those dollars can all come back at once and say hey, we want our gold.
We're turning in our currency.
Give us our gold.
And, you know, it's bad enough when you're talking about citizens making runs on banks.
If you're talking about entire governments, foreign governments bringing all of their cash reserves to you and saying we want gold, you got a really big problem.
And finally, in 1971, Nixon admitted like we don't have enough gold to cover the currency out there.
Sorry, guys, you can't turn that in for gold anymore.
Sorry.
And just kind of backed out of the room.
Yeah, he backed out of the room.
And it was it was a big deal because this isn't the kind of thing that we could.
We had pegged our dollar to like worldwide value.
So we couldn't just say that by ourselves.
Right.
Uh, in 1973, the, uh, the monetary fund, um, they went off the gold standard.
They basically kind of came along for the ride uh, and said, all right, everybody should kind of go to this fiat currency system.
And like, that was the true real end of the gold standard.
And like, there's this, that ship is so far out of the Harbor.
Now there's no way they could go back to it.
No.
And it eventually kind of became a fringe right wing position.
For some reason, they just kind of adopted it.
But that doesn't mean all of the right wing agrees with it.
In fact, Milton Friedman, who's a right wing conservative economist hero.
He was even like that's a terrible idea to go back on it.
He wrote a paper in, I think 1990, or co-wrote one, that basically demonstrated just how bad of an idea it would be.
But there's still plenty of people who are like, no, gold is where I want to put my faith in.
One of the reasons why it's still around is because people believe that if there's a social collapse—
Right.
Afterward, people will still accept gold.
They won't accept dollars or pounds or euros, but they'll take gold in return.
So that's one reason a lot of people still have faith in gold as an investment.
There's other people who are like gold's always going to become more and more valuable because there's a finite amount of it.
Right.
And that actually is the same thing for Bitcoin.
Right.
There's a finite amount of bitcoins, which means that over time, it's going to become more and more valuable.
It's going to buy more and more stuff, which makes it a deflationary currency, which actually makes it dangerous, because that means people are more likely to buy and hoard bitcoins or buy and hoard gold, because eventually it's going to become more valuable.
And that's how you go into a recession.
Yeah, I've never I'm just, you know, me and economics and money.
I'm just a big dummy with all that.
So cryptocurrency is something that, even though we podcasted on it, I just it's not like I'm saying, like I don't trust cryptocurrency.
I just I don't understand it.
And I have no interest in understanding it.
Yeah.
Yeah.
Although it does seem to have gained a lot of legitimacy, especially Bitcoin.
Oh, yeah.
Sure.
But I mean, it's a wild ride.
Like it was like 16,000 earlier this year or like last year.
And now it's at like 61 and 61 is down from 90 something a month or two ago.
Yeah it.
Maybe it's a long-term thing, but that's not something you want to.
I mean you would have to be so insane to trade that stuff on a daily basis.
I don't have the stomach for i'm just.
That's not who i am me either.
You know i want to.
I want to sit around and you and i want to sit around, listen to elevator music.
That's right, not not track the currency, cryptocurrency.
No, but for some people that is quite thrilling.
Oh, i bet it is.
Have fun with that, but that's your thing.
For larry david Right.
So, like we said, I think, in Act One, that you know there are still people that argue for the gold standard and people that argue against it, even though that ship has sailed.
And there are, you know, some pretty good arguments each way.
If you're for the gold standard, you know you can say like hey, that's going to definitely put a lid on this crazy government spending that we have had going on.
And it'll stabilize the money supply.
We've seen it do that literally.
So you know that's a pretty decent like.
They got a lot of like data to back those claims up for sure.
Yeah.
One of them is it's just basically throwing shade at how out of control government spending gets when the government is allowed to literally just print money when it wants to.
One of those things that you'll see a lot is that the purchasing power of the dollar has declined by more than 85 percent since the US left the gold standard in 1971.
And the reason why is because the government just keeps printing money anytime it likes, which causes inflation.
Well, that's purposeful.
Like a fiat currency is an inflationary currency as opposed to a deflationary currency like gold.
They want inflation to happen because inflation you can keep on top of.
It's deflation that's really hard to come out of.
So yeah, it's not really a problem.
If you can buy less with a dollar than you did before because you're adjusting for inflation, it's not a problem, as long as your wages are keeping up with it.
The problem is wages haven't kept up with it.
And so people are being paid the same amount as before and are able to buy less because they have less money, even though the cost of living has increased.
Their wages, our wages, haven't gone up commensurate to it.
Yeah, for sure.
And if you want to talk about, like you know, we're talking about printing money and a spike in the cash supply.
Here's a pretty staggering statistic.
The supply of money in 1970 this is what they call the M2 money supply, which is all the cash, all the money in checking accounts, all the traveler's checks was about 600 billion in 1970, the year before I was born.
In August of last year, it was $22 trillion, which is an increase of 3,566% over whatever, 54 years.
And 20% of that was created in 2020.
Yeah, just that year.
Yeah.
Yeah.
So there's clear evidence that the government will just print money as much as it can, whenever it wants to.
Part of the problem is that also increases the national debt, because more money out there.
If you can print money, make new money.
You can spend that new money if you're the organization that is creating the money.
So the national debt increased tremendously, too, over that same time period from 1970 to –
2025.
Yeah, it could increase 9000 percent.
It was 398 billion back then.
And now it is over 36 trillion dollars.
And it's a number that is just hard to even comprehend that seemingly nobody.
Well, not nobody, but the right people aren't concerned enough about.
Right.
So gold bugs are like see, if you let the government print money, they're going to print money and they're going to spend more money.
The gold standard keeps them from being able to do that.
End of story.
That's right.
But there are anti-gold bugs.
There are people who prefer fiat currency and the ability for the government to step in and throw levers and control monetary policy through debate and decision making.
And that's one of the big arguments is like hey, we need to be able to make these decisions sort of on the fly and move quickly to save ourselves in times of doubt and in times of economic stress.
And they can also combat a lot of that data, too.
They can also say, well, yeah, but you really should look at these numbers instead.
Yeah, so gold bugs always say that there's stability in gold currency, right?
But the problem is that if you look at the gold markets, they fluctuate tremendously.
So that's actually kind of out the window.
Another one, this one?
I couldn't find an answer to that.
I can't wrap my head around though, is the total value of all the gold in the world is 36 trillion, which is eye-popping.
That's our national debt.
Yeah, exactly.
Ironically.
But if you took the entire global economy and valued that, that's more like $126 trillion.
So if the world went on a gold standard again, how would you shrink?
$126 trillion into $36 trillion.
That right there, that's what we've been saying.
The ship has left the harbor.
That train has left the station.
It's just, again, there's not enough gold to cover the value of everything in the world.
Yeah, for sure.
Another big sort of argument that people against the gold standard point to is like hey, look at our stock market.
People aren't putting their money in their mattress anymore and making runs on banks.
They're shifting that money, their cash dollars into the stock market.
And those dollars have have grown and grown and grown.
I mean, there are always dips in the stock markets.
And even you know there have been some very bad dips days in a row with the stock market and, and you know the the crash of 2008 and the dot-com bubble and all that stuff always affects the stock market but it's, it's proven to be a pretty stable thing.
Over time it has and in fact um, if you there's this um comparison i found i can't remember where i found it but if you took five thousand dollars in 1971 to celebrate the birth of chuck yeah, And you said I'm going to go buy 5000 worth of gold.
It's gonna be a great present for Chuck.
I'm also gonna bring him a little myrrh, a little frankincense.
It's gonna get biblical in here.
The gold actually would have increased about 7,500%.
And gold prices are so all over the place, this is probably already out of date.
But I think at the end of 2025 you would have had 379500 worth of gold from that 5000 worth of gold you bought in 1971.
So that makes it seem like, okay, great, gold's a good investment.
What happens if you invested it in the stock market?
Well, if you had that same five grand after my birth and put it in the SP 500, you would have made 271500.
So the gold standard wins in that case.
But that is if you are just taking those dividends, if you're taking the money that you're making from the stocks and saying like, all right, that's my income, or whatever.
If you had kept reinvesting all that from the five grand, it would be 1185 million plus.
What?
500 bucks?
Yeah.
So that's a return of almost 24,000% rather than 7,500%.
Right.
And even if you're like, okay, well, wait a minute, adjusting for inflation, how much is that?
So I looked it up.
I went on our beloved West Egg, and something that costs 5000 in 1971 would cost you 40000 today right,
So even after you bought that $5,000 thing, you'd still have $1.1 million in change left over.
So it would be much better to invest it in the market.
As volatile as it is, as unpredictable as it is, as easy as it is to lose your shirt over the course of time, the ability to unleash the stock market that having a fiat currency and being able to print money creates.
It's a better return on investment.
Yeah.
I'm surprised I got through this one.
You did great.
Well, you did great.
You did great.
Who wrote the original article here?
Who was this?
That was Olivia Joint.
She did great.
Yeah.
She did great, too.
And you did a lot of great supplemental research.
Everyone's doing great, everybody.
It's just great up in here.
We should also say we probably got a lot of stuff wrong.
We probably walked past a lot of stuff.
This is such a detailed, nuanced discussion that people who are like monetary policy wonks this is one of their favorite things to do is to point out all of these nitpicky little things based on mind-boggling economics that are really hard to describe.
We just glanced over the surface of this.
But I think probably we got more right than you'd think.
Yeah, it's tough to tackle something like this, because there are people that know a gazillion times more about this kind of thing than we do.
Yep, and Chuck just said tackle, so he unlocked listener mail.
I'm going to call this, this is from our crowds episode.
And this is a classroom hack, a question hack from a – I think a teacher.
Okay.
Hey, guys.
Love the episode about crowds.
Yeah, I'm a middle school teacher, and crowds are my standard environment.
Your comments about being afraid to ask a question in class really spoke to me, because a big part of my job is navigating the power of language with crowds and my students.
There's a simple teacher hack that is most effective and easiest –
The easiest change I've ever made to my communication with students and Aaron from New Brunswick, Canada.
I will go ahead and say that anyone speaking in front of a crowd where you source questions, I think this is a pretty good way to go.
Okay.
And here it is.
Instead of saying, does anyone have any questions?
What I say instead is, what questions do you have?
There must be questions.
It really works.
Give me some questions.
Completely different response from the students, guys.
The assumption that questions are expected always prompts at least one kid to get the courage which opens up the gates for everyone else who is too apprehensive.
Thanks for being my first podcast in 2012 and for continuing to bring joy and relaxation to a tired but satisfied teacher.
Peace and love.
And again, that is from Aaron with an E from New Brunswick, Canada.
Thanks, Aaron.
Peace and love back to you, too.
And thanks for teaching.
It's a good hack.
It's a great hack.
Questions.
Who's got them?
I know there's some.
Don't lie.
Rack.
And then just get more aggressive.
Right.
Huh?
Huh?
Give me a question.
Yeah, that works.
If you want to be like Aaron and send us a great email and say peace and love, that's awesome.
You can send it off again via email to the email address stuffpodcasts at iheartradio.com.
Stuff You Should Know is a production of iHeart Radio.
For more podcasts from iHeart Radio, visit the iHeart Radio app, Apple Podcasts or wherever you listen to your favorite shows.
We went from normal life, healthy child to acute lymphoblastic leukemia or B-cell ALL.
The St.
Jude team came up to get CJ via ambulance.
Shortly after that, I noticed a rainbow.
It meant that there was hope.
We were driving into hope.
To have hope is to have your child healthy and we have that because of St.
Jude.
You can help kids fight childhood cancer.
Please become a St.
Jude Partner in Hope today by visiting musicgives.org.
Hey, I'm Jay Shetty, host of the On Purpose podcast.
I'm joined by Luke Combs, award-winning country music artist and one of the most authentic voices in music today.
The guy that says he's always going to be there and that will do anything to be there is the only guy that's not there.
No matter what, I'm going to prioritize my wife and my children.
I dread the conversation with my son.
Listen to On Purpose with Jay Shetty on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts.
I'm Amanda Knox and in the new podcast Doubt, The Case of Lucy Letby, we unpack the story of an unimaginable tragedy that gripped the UK in 2023.
But what if we didn't get the whole story?
Everything's been made to fit.
The moment you look at the whole picture, the case collapses.
What if the truth was disguised by a story we chose to believe?
Oh my God, I think she might be innocent.
Listen to Doubt, The Case of Lucy Letbe on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
This is an iHeart Podcast.
Guaranteed human.
