Complementing
talk about the monetary system, we say that the monetary system is a system of
historical evolve and change with time according to the evolution and changing economic
and social system of every society or the state, we will see the following is a
brief overview of some important rules in the monetary system, including the
first base cash commodity system (metal) , The Monetary Base commodity is a
system that determines the order in which the law cash price as measured by a
standard fixed unit settling accounts monetary unit of this item or of all
those goods that choice is the base currency.
I was
with base metal commodity exchange in one of several forms according to its
historical development are as follows:
First
System Gold Coins
The
system of gold coins is the first form of the gold standard, where deliberated
in which gold coins, either alone or alongside coins MP or banknotes MP for gold,
or traded on its side money optional or other legal, but in all cases, the gold
coins are the main criticism and final, In order to achieve operation of the
system required the availability of certain conditions, must be assigned a
fixed percentage of the monetary unit used and a certain amount of gold of a
certain weight and caliber particular, has to be the availability of complete
freedom Stamping gold without charge or at a cost of slightly each asked to
convert gold bullion to coins (Freedom of population), must have complete
freedom to melt gold coins (freedom of smelting), also has to be the
availability of complete freedom to convert other currencies traded to gold
coins price legal hard for gold, and finally must have complete freedom to import
and export gold without any restrictions of any However, with regard to the
type of legal aspects that protect community members from fraud and deception.
System
allows gold coins for people to trade money other along with gold coins, which
will expand the size of the money supply and diversity, also is a global system
because it included all countries in the world for a long time, there is no
country in the world except you used, important advantages, of course, is equal
to the purchasing power of money and went together.
System
defects Gold Coins
It is
strange that some features sometimes are the same flaws of the other side, the
most important system defects gold coins is a rarity, did not expand the
production of gold in front of the expansion of production of goods and other
services around the world, which led to rising prices in the precious metal,
and also led the development of the modern world to the emergence of the needs
of many other growing demand for the precious metal, such as the use of gold in
the fields of medical, therapeutic and industrial, as well as asylum some to
treasure and monopoly, The evolution of this system means the trend towards
monopoly of gold and control of the market and because of this system means the
global market.
Advantages
of metal per system
Driving
system of metal per stabilize levels of global prices over the long term, and
that leads to the expansion and development of international trade and the
expansion of trade as well as the freedom of movement of capital, however,
different countries, and the implicit system is a metal per insured against the
risk of economic crises because the international payment system ensures
efficient distribution of resources Economic, making influence over short
periods of time quite a bit, as the result of this system (metal per system)
role without the need for government intervention that their role is limited
only to the monitoring and follow-up and ensure the application of the law.
Quite
simply, we can say that the disadvantages of the system of metal per barely
connected countries underdeveloped or less developed, while investigating a
system of metal per stability in the exchange rates of the developed countries,
but not so with underdeveloped countries or Azlq them from the door of
politeness term developing nations, where she was to large fluctuations, which
can be considered as errors of commission responsible for managing monetary
system independent of the gold much less damage to local economic activity
resulting from its association with the international gold system, have proven
practical applications that this system does not achieve stability in prices
because gold production has not flexibility that makes the display responds
automatically with the demand for it.
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