Classic gold standard:
a monetary system in which the standard economic unit of account is based on the fixed weight of gold.
Redemption pressure stopped countries from printing too much money in gold standard.
A gold standard is a fixed exchanged rate system.
The impossible trinity in international trade
(1) fixed exchanged rate
(2) domestic control of money supply
(3) free trade and capital flows
Why are central banks and gold standard incompatible?
Because the only way for central banks to get around people's redemption of notes for gold is to suspend the redeemibility of their notes into species.
At first, the suspension was only temporary, but during the 1930s, many central banks permanently suspended the redeembility and converted notes into fiat money.
Central bank is a central bank because it monopolizes note issuance.
Fiat money
(1) inflation is more common after the abandonment of gold standard
(2) cheaper to produce
(3) senioriage accrues to government
Article 1 section 10 denies states from issuing fiat money. But it doesn't specify whether Congress could do so. In this way does the government inverts section 10.
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