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Gold Standard

Gold Standard

2/12/2010 11:05:14 PM

Since Roosevelt forced redemption value of gold against the U.S. dollar, it increased by 50 times, and the effectiveness of the global economy leaves much to be desired. Need a new, more sophisticated financial system, which would be of high stability, and most importantly - meet the world requirements.

But, as the saying goes: everything new - well forgotten old. Because of their natural qualities, gold is the ideal means of payment and savings, but, in consequence of the following reasons, it is still not "stuck" in the modern world.

The slowdown in the economy. For the full functioning of the economy growth of trade must be supported by corresponding increases in the money supply. If the base currency will be used by gold, in theory, should occur deflation and slow growth. However, moderate growth is better than a fast rise and a painful fall. Moreover, estimates of GDP growth with no secured the money does not guarantee the accuracy in terms of real growth. Therefore, this "deficiency" is more dignified, except for the elite, which holds the manipulation of the monetary system.

Complexity and security. Storage of gold is always accompanied by a large proportion of the problem and secure from theft and looting. In this age of information technology, this problem can be easily eliminated. Enough to place the gold in a special storage, and emit an electronic currency availability. But, once was exactly the same situation with the banks, which are traded in gold certificates, and later discovered that secured were not all certificates. Error was that it allowed a partial reservations. Too great not want to lose their money. Fully redundant and independent audit will improve the reliability of many times over.

The interests of States and certain circles. The biggest obstacle, and indeed, the reason for rejection of the gold standard. The State may urgently need money and the easiest way to instruct the central bank to emit. Practice shows that this policy is to finance wars, and aims at dominance in certain spheres of influence. Typically, this has a negative impact on the lives and welfare of civilians.

Conclusions. There are no obstacles or technical limitations to create a truly effective and reliable monetary system based on the gold standard. Credibility of the largest U.S. financial system eroded and someone will take the opportunity to take its place.

Practice. Gold Dinar - tender, is present in the private back in 22 Muslim countries. All the coins contain 91.7% gold. Weight of one dinar is 4.25 grams. It is planned to use for inter-state calculations using the clearing mechanisms.