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Metallic vs fiduciary currency

  1. Aug 5, 2011 #1
    I've been learning a litle bit of Economics by myself. I was reading about how the money is established by a country. I'm working on understanding about fiat money, but I've been reading about people discusing about the importance of adopting a metallic currency, like gold or silver. This people say Central Banks are not necesary for having a healthy money.

    https://www.youtube.com/watch?v=NwHdSl1ASbA

    https://www.youtube.com/watch?v=cJ9mMEDoN5s

    How good is the idea? Do we have a good opportunity in adopting a metallic standard instead of fiat money?
     
  2. jcsd
  3. Aug 10, 2011 #2
    It would be very difficult to make a change in a developed country.
     
  4. Aug 10, 2011 #3

    BWV

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    The supply of gold and silver is not necessarily stable, large discoveries have caused inflations, most famously in the price revolution of the 16th century, caused by the influx of gold and silver from the Americas; and following the 1896 gold discoveries in South Africa. Under a gold standard you are in essence tying the growth in money supply to the output of the gold mining industry

    http://wwz.unibas.ch/fileadmin/wwz/redaktion/makro/Papers/The_Price_Revolutiona.pdf

    http://www.j-bradford-delong.net/pdf_files/Pre-World_War_I.pdf
     
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