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Modified Gold Standards

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pairunoyd Posted: Mon, Jun 8 2009 11:20 AM

How could a politically determined gold standard work in the free market?

 

Here's some random examples. Tell me how you think it'd play out:

Gold backed money but a large minimum is required to convert to gold, e.g., $10,000 or $50,000 or $100,000

Gold prices set very high, e.g., $5,000/oz or $10,000/oz

 

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pairunoyd:
How could a politically determined gold standard work in the free market?

The inherent issue with this statement politics screws with gold...

In a system where the gold is fixed, basically you have production supporting the standard....

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pairunoyd:

How could a politically determined gold standard work in the free market?

 

Here's some random examples. Tell me how you think it'd play out:

Gold backed money but a large minimum is required to convert to gold, e.g., $10,000 or $50,000 or $100,000

Gold prices set very high, e.g., $5,000/oz or $10,000/oz

 

Don't understand the question, please reformulate.

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Juan replied on Mon, Jun 8 2009 2:35 PM
How could a politically determined gold standard work in the free market?
badly.

February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church.
Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."

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freetx replied on Mon, Jun 8 2009 4:52 PM

pairunoyd:

Gold prices set very high, e.g., $5,000/oz or $10,000/oz

This seems to be a very popular misconception when talking about 'gold standards'. Under a true gold standard, there is no "price" of gold in dollars. The dollar becomes a measure of a specific amount of gold.

That is to say if you declare $1 USD = 1 grain AU - the notion of the 'price' of gold disappears.

 

 

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