The combination of these conditions distinguish
bimetallism from a limping standard, where both gold and silver are legal
tender or trade money where both metals are freely coined but only one is legal
tender and the other is trade money. Economists also distinguished the legal
bimetallism, where the law guarantees these conditions, bimetallism where both
gold and silver coins actually circulate at a fixed rate.
Bimetallism was intended to increase the supply of money,
stabilize prices, and facilitate setting exchange rates. Some authors have
argued that bimetallism was, by construction, unstable. Changes in gold-silver
exchange were, in their eyes, leading to massive changes in the money supply.
Bimetallism was thus inherently flawed and the advent of the gold standard was
inevitable.
What is the difference between the monetary system under
the system of the metal per system and the miners? Maybe you do not need to
answer to many clarify it also appears from the name, is that the system that
were identified in which the value of the monetary unit for the miners two are
gold and silver, as the conditions required to maintain a fixed relationship
between the value of the monetary union and the value of each of the miners are
the same conditions that we have mentioned previously in connection with the metal
per system, there is no need to re-talk about it in my opinion. It must be
pointed out that the main factor in the stability of trading metals together is
a continuation equivalent to the ratio between a value of market capitalization
and the ratio between the worth of legal as currencies, but if differed These
percentages, the metal that goes up its market value exceeds its legal tends to
disappearing from circulation and eliminates the metal cheaper instead.
The rise in the market value of gold on the legal value
will tempt the audience melting units gold (gold coins) and sold gold alloy market
price high because the price weight better than their price in cash, so they
can make a profit from this process, and here's critics say bimetallism that it
ends with the disappearance of the metal good or metal top with a market value
of trading, and thus turn the system to a system of metal miners one again, so
it did not continue in the bimetallic system of life-consuming process, and
also because the country that followed identified the different proportions of
the two.
But which is calculated for this system that the use of
silver metal along with gold metal in the monetary base increases the size of
the base and the consequent to become the overall supply of money is greater
under this system than in the case of a metal one, then it can be for the
monetary authorities to carry out operations meet the needs of the public to
cash in easy and efficient, and the use of two metals in the monetary base
metal rather than one introduces some flexibility in the monetary system and
then tend purchasing power of the monetary union, or the price level to a
degree of relative stability than is available under the regime of the metal
one.
*******
Pictures
Source: Flicker
No comments:
Post a Comment