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| Gold Key, weighing one kilogram is used to access a ten digit account number which is known only to the bearer of the Gold Key. (Photo credit: Wikipedia) |
No one knows whether we are returning to gold standard or not.
Some say that we should, that this is the only way we can end the world
economic crisis. Others are totally against it, or simply suggest that
it would be a mistake. No matter the opinions of the financial
specialists, going back to gold standard definitely has its positive
points, but also its drawbacks.
Some governments encourage gold standard indirectly. Among these, the Chinese government has had the most striking shift of heart when after a long period of interdiction, allowed and even promoted purchasing the precious metal. Nowadays even those Chinese who are not very wealthy invest in gold, because they know that this is the only solution to forget about the economical problems and the financial crisis.
Russia is another country which strongly encourages a return to gold standard. Officials from Kremlin suggested a few years ago that there is a stringent need for an alternative to the powerful Dollar, that might not be so strong forever. They were right and the decline of the American currency led to the economic instability in all countries that had economic relationships with the US and not only.
The advantages of gold standard are obvious. The long term stability of the prices the impossibility of having hyperinflation are welcomed after times of instability, when nothing seems to be sure anymore. This impossibility of increasing the prices is caused by the fact that the gold supply used for monetary purposes is limited. The quantity of precious metal used to mint gold bullion coins is limited, therefore only two special situations can change the prices: finding a new source of yellow metal or in case of wars, when goods are destroyed.
Those who support the most going back to gold standard are the Austrian School of Economics followers and some politicians around the world. In what concerns the US monetary system that had the most to suffer lately, specialists say that it was in fact created retaining the same properties as the gold standard. So in their opinion there is no need to going back to the real gold standard, as the current monetary policy is a healthy one.
Malaysia was the only nation that had a concrete initiative in what concerns reintroducing the precious metal as a universal currency. The Malaysian prime minister had this initiative with the purpose of having a currency all over the Muslim nations, but also to give the Islamic world a sense of unity. In spite of his good intentions, the Islamic gold dinar was not adopted as a currency, even though it meant independency from the US Dollar.
Some governments encourage gold standard indirectly. Among these, the Chinese government has had the most striking shift of heart when after a long period of interdiction, allowed and even promoted purchasing the precious metal. Nowadays even those Chinese who are not very wealthy invest in gold, because they know that this is the only solution to forget about the economical problems and the financial crisis.
Russia is another country which strongly encourages a return to gold standard. Officials from Kremlin suggested a few years ago that there is a stringent need for an alternative to the powerful Dollar, that might not be so strong forever. They were right and the decline of the American currency led to the economic instability in all countries that had economic relationships with the US and not only.
The advantages of gold standard are obvious. The long term stability of the prices the impossibility of having hyperinflation are welcomed after times of instability, when nothing seems to be sure anymore. This impossibility of increasing the prices is caused by the fact that the gold supply used for monetary purposes is limited. The quantity of precious metal used to mint gold bullion coins is limited, therefore only two special situations can change the prices: finding a new source of yellow metal or in case of wars, when goods are destroyed.
Those who support the most going back to gold standard are the Austrian School of Economics followers and some politicians around the world. In what concerns the US monetary system that had the most to suffer lately, specialists say that it was in fact created retaining the same properties as the gold standard. So in their opinion there is no need to going back to the real gold standard, as the current monetary policy is a healthy one.
Malaysia was the only nation that had a concrete initiative in what concerns reintroducing the precious metal as a universal currency. The Malaysian prime minister had this initiative with the purpose of having a currency all over the Muslim nations, but also to give the Islamic world a sense of unity. In spite of his good intentions, the Islamic gold dinar was not adopted as a currency, even though it meant independency from the US Dollar.
When deciding to invest in gold have into consideration buying gold bullion coins, which have 99.9% purity.
Article Source:
http://EzineArticles.com/?expert=Jack_Wogan
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