We should return to the gold standard

I hereby accept your challenge and will claim that we should NOT return to the gold standard.IntroductionBut before I begin with my first arguments I'm going to mention a few things.- First of all, this is the first debate I handle on this site, so I'm curious what it's like- Second of all, I noticed that debates like http://www.debate.org... the participants format their posts. As a friendly piece of advice, your posts look better if you'd use a bit more formatting- Third, use sources. Your arguments are easy to rebut withoutMy post is ordered like this: Arguments against the gold standard Rebuttals Conclusions Sources 1) Arguments against the gold standard 1. Reduced flexibility of central banksIf the economy is in a recession central banks shoud lower interests to stimulate the economy. If the economy is about to overheat, the interest should be raised to slow the economy down. This is both to keep the inflation under control. Now let's see how effective the gold standard and the central bank are at keeping inflation under control:Here's a graph of the CPI when the USA had the gold standard: http://cdn.theatlantic.com...; width="425" height="267" />(1)Gold standard? Yes. Keeping inflation under control? No.Now let's put it next to the inflation of the last years when we had a fiat currency: s://figures.boundless.com...; alt="https://figures.boundless.com...; width="426" height="209" />(2)Gold standard? No. Keeping inflation under control? Yes.Conclusion: a fiat currency gives central banks the power to keep the inflation under control. 2. Unstable price of gold make the financial system unstableLet's imagine the current price of gold is $400 per ounce and the bank has 1000 ounces in its safe. Therefore it can issue $400.000. What will happen if the price of gold raises to $600? The bank can now lend out $600.000, which is $200.000 more. This increases the supply of money a lot and will make the economy overheat, creating inflation.Later the price of gold drops to $400 again. The bank needs 1500 ounces for the $600.000 it has outstanding, but it only has 1000 ounces. This is a problem that can get solved in only two ways: Hope the price of gold goes up again Wait till people pay back the money the bank loaned to them earlier. Then just burn that money, so the $600.000 outstanding will drop to $400.000. Then the bank is able to back up all of the notes outstanding again To prove that prices of gold really are unstable, check this graph: (3)While the gold standard was around, the price of gold was very unstable.Conclusion: the gold prices are too unstable to have an entire financial system depend on it.I could give more arguments, but let's keep those for the next rounds.2) RebuttalsAllow me to point out why I disagree with your arguments: 1. InflationI already rebutted this in my first argument: Reduced flexibility of central banks. 2. Decentralization and politicsYou claim the Federal Reserve (FED) is prone to cause depressions. Can you back this up with facts from sources? 3. HistoryIt seems like you claim the Roman Empire fell, because they started using fiat currency. But if fiat currency is such a disaster for an empire, why did it take 200 years before the empire fell and not 20 years? Furthermore, sources please!You also rebutted two arguments of mine even though I never made them, nor was I going to make them. Therefore I fail to see how they add value to your case.3) ConclusionsWe should NOT return to the gold standard for two reasons: A fiat currency gives central banks the power to keep the inflation under control The gold prices are too unstable to have an entire financial system depend on it I'm waiting to see what your reply is. 4) Sources(1) http://www.theatlantic.com...(2) https://www.boundless.com...(3) http://www.gcasset.com...