Why is gold used as money?

Gold in the form of money Gold does not dissipate into the atmosphere, does not catch fire and does not poison or radiate to the wearer. It is rare enough to make it difficult to overproduce and is malleable for minting coins, bars and bricks.

Why is gold used as money?

Gold in the form of money Gold does not dissipate into the atmosphere, does not catch fire and does not poison or radiate to the wearer. It is rare enough to make it difficult to overproduce and is malleable for minting coins, bars and bricks. Civilizations have constantly used gold as a valuable material. Gold has always played an important role in the international monetary system.

Gold coins were first minted by order of King Croesus of Lydia (an area that is now part of Turkey), around 550 BC. C. Money from raw materials is inconvenient to store and transport in large quantities. In addition, it doesn't allow a government to manipulate the flow of trade as easily as a fiat currency does.

As such, commodity money gave way to representative money, and gold and other species remained as backup. Economist John Maynard Keynes called gold a “barbaric relic”, suggesting that its utility as money is an artifact of the past. In an era full of cashless transactions and hundreds of cryptocurrencies, this statement seems more true today than it was in Keynes's time. The gold standard limited the flexibility of central banks' monetary policy by limiting their ability to expand the money supply.

Most of continental Europe made the conscious decision to adopt the gold standard and, at the same time, to allow the mass of inherited (and previously depreciated) silver coins to remain unlimited legal tender and convertible at face value into a new gold coin. The gold species pattern ended in the United Kingdom and the rest of the British Empire at the outbreak of World War I, when Treasury notes replaced the circulation of gold rulers and gold semi-sovereigns. Gold mining is no exception, and while operating costs have increased, the price of gold has fallen slightly over the same period, further affecting the profitability and margins of gold mines. It covers the mid-17th century until the decision of the British Government to allow the free exchange of paper, money and gold, and presents documents, mainly from the United Kingdom, related to the establishment of the gold coin as the centerpiece of the British financial system.

Memorandum of the Bank of England, which consists of a report on the distribution of gold reserves in the countries occupied by Germany to determine the amount that may have fallen into German hands. Exquisitely designed forms of yellow, pink and white gold look out over an exotic display of corals and underwater fauna. From an elementary perspective, gold is the most logical option as a medium of exchange for goods and services. Report of the house of commons Committee issued in response to the previous month's request from working-class goldsmiths in London regarding the export of large quantities of silver from England to France and the excessive burden this placed on working goldsmiths.

Simmons, in the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, finance insolvent banks and finance government deficits that could prepare the conditions for expansion. Since that date, it has remained at a constant value in terms of gold because the Bank regularly supplies it when necessary for export and, at the same time, uses its authority to restrict as much as possible the use of gold in the country. By replacing their discretionary monetary policy regime with a gold standard, which defined a “dollar” as a specific number of ounces of gold, price stability and employment outcomes would be better for the average American. Memorandum from the Bank of England, with estimates of the amount of gold from the occupied countries that may have fallen into German hands.

It could be said that gold is one of the only substances in the world with all the qualities for this work, including sustainability. The relationship between abandoning the gold standard and the severity and duration of the depression was consistent in dozens of countries, including developing countries. .

Sharon Perrella
Sharon Perrella

Professional beer lover. Pizza geek. Devoted food advocate. Evil travel aficionado. Bacon evangelist. Typical introvert.