Many economists have strong opinions about the gold standard. Few seem to understand how a gold standard functions.
Although the multiplication of national gold standards that gave rise to the classical gold standard was partly accidental and partly the outcome of deliberate legislation, market forces also played an important part in it.
Money did not originate in the laws or decrees of kings and princes. Money, as the generally accepted medium of exchange, emerged out of the market transactions of a growing number of buyers and sellers in an expanding arena of trade.
The way out of the dilemma and to resolve the problem that is posed by the existence of national currencies under state authority, is to use private money at a global scale. Gold once served this purpose and could again. Further, the new electronic monies, like Bitcoin for example, are not bound to a specific state or nation.
The Fed should focus entirely on the soundness of the dollar and the banking system. Innovations like cryptocurrency and the growing infrastructure associated with it are the business of private enterprise, not government and official institutions.
The classical gold standard has gotten a raw deal in our historical memory. Setting the record straight is a crucial step on the road back to restoring sound.
In many ways, we are better off than we were in the era of the international gold standard. But monetary freedom is not one of them.