Gold standard

of these articles treats the economical gold standard, for the procedure for the Zielerreichung sees gold standard (procedure)

as gold standard designates one the covering of a currency by gold. One calls the rate of exchange between cash and gold gold parity. Thus (theoretical) the obligation of the central bank is connected, Cash into an appropriate quantity of gold to exchange at any time (obligation to the Konvertibilität). From the possession of a cash note thus a direct requirement on a certain quantity of gold results, what meant redemption however in Germany according to banking law of the 14.März 1875, §18, only into “coursfähiges” German money. Practicallythat meant that one received fractional coins and papierne realm cash lights as a citizen beside gold coins ( = Kurantgeld) also depending upon cash situation at the realm bank cashes on demands.

The pure gold standard represents a special case of the rate of exchange parity and exists actually only in the theory.

Already at present of the Silver standards made the governments the experience that never at the same time all cash notes, e.g. before beginning of war or an economic crisis, to the conversion in Kurantgeld at the bank switches for exchange were presented. Therefore the governments could do already in 18. and 19.Jh. over their central banks (even if it sometimes formallylegally private banks were) ever more uncovered paper money (and if necessary to the compulsory rate) into the circulation set than it gold or silver in their safe deposits to possibly. Conversion to reproach had. If necessary one could suspend the redeemability of the notes in Kurantmünzen by law, which e.g. inEngland at present the napoleonischen wars also happened. Reminded is here to (only) the third covering of the realm notes and the abolition of the redeemability of the notes in coins at the beginning of the 1.Weltkrieges. See also Goldmark, bimetalism, monometalism.

Table of contents

kinds

one differentiates between:

  • Gold rotating currency: Gold coins serve as currencies.
  • Gold core currency: Paper money rotates and gold with the central bank as reserve for the international exchange is held.
  • Golddevisenwährung: The central bank reserve can consist of the foreign exchange of other gold standard countries, howthis before the end of the Goldkonvertibilität of the US Dollar 1971 in the Federal Republic of Germany the case was.

If for the entire quantity finding in the circulation money is present gold in the central bank, one speaks of a full gold standard (100% covering). The full gold standard is however onlya theoretical case would never be sufficient, there the entire available gold quantity in the world around all not-golden currencies to replace (including Buchgeld) either as gold rotating money or serve as covering of the not-golden currencies deposited with the banks. Even if silver still came in addition, that becameare not sufficient.


history

historical was inserted in most industrial nations the gold standard between 1871 (Germany) and 1900 (the USA) and replaced the silver-based currencies prevailing before. In crisis periods (1. and 2. World war away, world economic crisis) many states moved from it, some ledthe gold standard afterwards. 1944 were created with the Bretton Woods system an international monetary system which is based on the gold-deposited US Dollar, which failed however to 1973, after the US Government in consequence of the Viet Nam war became internationally insolvent and gave up to 1971 the gold standard. Since then gold-based currencies are the exception.

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consequences the obligation to the Konvertibilität limit the expenditure of cash by the central bank and limit their capacity to act to react to economic fluctuations with change of the monetary policy. That means: it comes with an enlargement of the overall economic goods quantity without appropriate enlargement of the availableGold quantity inevitably to a deflation, in the reverse case to an inflation. However a hyperinflation is impossible as consequence of the abuse of the Seignioragefähigkeit by the government on adherence to the gold standard.

Proponents of the gold standard maintain that the abolition the classical gold standard at the beginning 20. Century(e.g. by Great Britain 1914) to an inundation of the world also again created money to the unhealthy restaurant blister in the 20's (the “golden twenties”) led, and as consequence to boron loweringrapid (black Thursday) and to the economic crisis in the 30's. 1995 were actual- due to the inflation - a U.S. - Dollar from the year 1940 only 8 U.S. - Cent worth. In this connection sometimes the speech is also from a gold conspiracy.

Whether the advantages of the gold standard the disadvantages outweigh are among economists a classical issue. The one side representslike already John May pool of broadcasting corporations Keynes the thesis that the disadvantages of the gold standard outweigh, particularly in an increasingly globalisierten economy, and that economic crises favoured by it a strong coupling of currencies without consideration for the economic development of the respective countries forcing and money market-political interferences toStabilization of the economy verunmöglicht. In addition, the contrary view, dirigistische interferences is common is not solution but a cause of crises.

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