Gold as Money

In a recent interview, financial journalist James Grant noted that while about two or three hundred U.S. economists don’t think gold is money, about 300 million Americans do.  It’s been a long time since Washington acknowledged this belief held by most of its citizens. The U.S. government took away the right of Americans to convert dollars into gold in 1933 and the ability of foreign governments to do so in 1971. But since then neither Americans nor people around the world have given up the idea that gold is a store of wealth that equals money. If you asked a crowd on a street corner if they preferred $10o0 worth of U.S. currency or $1000 worth of gold, most would choose the gold. Wouldn’t they?