Gold
standard
Increased
needs of the community members around the world, and has evolved and led to an
increased demand for money in the form of coins for gold, pushing the banks to
issue money cover relative is full of gold then 0.50%, for example, then less
so, then none of it, as we shall see later. The days passed and developed
communities, and with World War I increased the expenses of the purchase of
weapons to a large extent, and doubled the obligations of funding for the war,
prompting all of England, France, Italy and the United States to hold a
conference Junoa famous, and came to the most important results of the
abolition of gold coins and the adoption of a system of gold bullion beginning
of the year 1925, accompanying the court to set conditions for the SEC and
smelting operations currencies, as well as set binding conditions on transfers
of legal paper money into gold.
The
differences between the bullion system and the coins system
Perhaps
some people are not able to differentiate between the system coins and system
alloys, because they involve substantial convergence, being the all of the
precious metal, or for the transfer of gold, and people have every excuse in
that, because the issue close to a large extent, technically or even in terms
of the value they are all In the end, weighed the balance of one, is subject to
Newton's laws of gravity and not for any other economic principle. Under alloys
there is no longer trading Numismatic gold, but was withdrawn from circulation,
and continued monetary authorities to buy all what is being offered by gold
bullion, at a fixed price in order to prevent the high monetary value of gold
from its market value, and perhaps this is what caused the confusion among
people between the regular bullion and coins.
Retained
the central banks gold in their vaults, and paid for sellers purchases of it
through the issuance of money and paper, or open current accounts for them
according to their wishes, there are no longer complete freedom to transform
the types of coins other traded into gold, but has been restricted this freedom
and put her too many conditions. The application of this system was useful,
because it helped to focus the Golden Reserve, in the hands of central banks
and governments, which provided an opportunity to introduce some kind of cash
management, under this system in addition to exercise some control over the
movements of gold at once.
Gold
standard is a monetary system in which the standard economic unit of account is
based on a fixed quantity of gold. Three types may be distinguished: specie,
exchange, and bullion. In the gold specie standard the monetary unit is
associated with the value of circulating gold coins or the monetary unit has
the value of a certain circulating gold coin, but other coins may be made of
less valuable metal. The gold exchange standard usually does not involve the
circulation of gold coins. The main feature of the gold exchange standard is
that the government guarantees a fixed exchange rate to the currency of another
country that uses a gold standard (specie or bullion), regardless of what type
of notes or coins are used as a means of exchange. This creates a de facto gold
standard, where the value of the means of exchange has a fixed external value
in terms of gold that is independent of the inherent value of the means of
exchange itself. Finally, the gold bullion standard is a system in which gold
coins do not circulate, but the authorities agree to sell gold bullion on
demand at a fixed price in exchange for currency.
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