Greece Should Return to a Gold Standard

Greece Should Return to a Gold Standard:

Reality is not optional. The Greek government is bust, which means it cannot and will not repay its debt in anything of material value. Introducing a soft drachma doesn’t change anything.

But the Greeks are now the first to take the pain. They are the first to hit rock bottom, so they should be the first to be able to rethink the situation and look at other options. As soft money is not in the interest of any society, why not be the first to go for hard money? Money that is harder and more trustworthy than any politicized national fiat money which the authorities can print without limit? Greece should allow the full and painful liquidation of the paper money excesses, it should let the government default, exit the euro and be the first to reintroduce a proper gold standard. This would give the country instantly much needed credibility. It would not only keep Greek savings in the country, it would attract savings from around the world, potentially making the country a magnet for savers everywhere who are increasingly concerned about aggressive monetary policy and are desperately looking for safe places to park their cash.