![]() ![]() The gold standard could not cope with the economic strain and confidence in this monetary system’s ability to hold through both good and bad times disintegrated, marking a low period in the gold price history. ![]() ![]() Political alliances changed and disappeared, international debt grew in unsustainable amounts, and local economies suffered. Economic Turmoil: 1914-1971 The fall of the gold standardĭuring the Great War, everything that the world economy had taken for granted for the past few centuries was thrown into turmoil. However, this golden period could not last and with the outbreak of the Great War in 1914, everything changed forever. During this period of economic stability, near-ideal political conditions prevailed between different governments as they worked together to improve the economy for the betterment of everyone. It was the period between 18 in the gold price history that the gold standard ruled the economy of the world. The 19th century's dramatic increase in global trade and production brought large discoveries of gold in the Americas, Australia, and South Africa, and at this point in the gold price history, the gold standard had gained its footing well into the next century. Governments began to stockpile large amounts of gold to settle any trade disparity between nations during difficult times, a practice that exists even today. Other nations soon followed, and by 1900, most players in the international economy were converts to the gold standard. In other words, gold backs the value of paper money.īy 1821, England had officially switched to the gold standard, becoming the first country in the world to do so. An economy that is backed by the gold standard is an economy that uses a monetary system in which paper money can be easily exchanged for a fixed amount of gold. It was clear that a gold standard needed to be implemented to instill the necessary controls on money. There was too much worthless credit, and the market was flooded with bits of paper with no meaning or value. In 1797, the European economy began to encounter problems by using paper money as the primary currency. The gold standard leads to economic bliss: 1797 - 1914 Real gold backs the economy The struggle between paper money and gold would eventually result in the introduction of a gold standard. While gold coins and bullion stayed as strong measures of value in the European market for several hundred years, paper money eventually began to dominate the economy in the 18th century. Gold coins and bullion faced a threat in the 16th century due to Europe's introduction of paper money. In this way gold’s place in the world economy was established. These gold rushes were a pivotal time in the gold price history, because by the 16th century, it had increased Europe’s supply of gold by 500%. However, the demand for gold currency could not keep up with the limited supply of gold bullion, which soon led to the great gold rushes in America during the 15th century. This was when gold was made into coins for the first time. Gold only entered the local economy at the beginning of the gold price history around 700 BC. Visiting any of the world's ancient sacred sites demonstrates how gold’s beauty and splendour were used to worship the ancient gods. The Origins of the Gold Price History: 700 BC to the 16th Century From religious icon to market standard Understanding the gold price history is critical to understanding its importance to investors, and why everyone should hold at least part of their savings in gold with FirstGold™. While government-issued paper currencies burst into use and then quickly lose their value, gold and silver continue to be traded in every country and in every era. Throughout the ages, it has become clear to economists that the only currency to retain its value is that of precious metals: namely, gold and silver. ![]()
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