Fiat exchange rate in the world and gold

Fiat exchange rate in the world and gold

Experts say whether the fiat rate or the gold standard will ensure economic stability.

The gold standard prevents central banks from pursuing policies that can ensure economic stability in the event of a crisis. Because the gold standard determines the distribution of money. And central banks will find it difficult to reduce or increase interest rates. On the other hand, there is the advantage that a cash printing machine cannot operate indefinitely, which can lead to a distortion of economic stability. However, the determining factor with money is not its growth rate, but its purchasing power. In a free market, money is like commodities, the US dollar and other currencies are not independent entities. Unfortunately, the name US dollar was used before 1933 to refer to a piece of gold weighing 23.22 grains or 1.50 grams. Other coins also represented a certain amount of gold.

In the exchange economy, gold is exchanged for goods and services. Gold is part of wealth, so as it is now, it promotes personal life and well-being. If money increases without insurance, then there is an increase in product production. If the money generated from anything decreases, then production decreases. Central bank policies that seek to stabilize the economy lead to a cycle of growth and improvement (the economy grows and falls backwards). The gold standard does not cause instability. Gold is a solid way to preserve value, which is why it is so popular with investors. Investors can of course improve their portfolio and values ​​from gold companies. Maple Gold Mines or Caledonia Mining can be considered.

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