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Re: [PLUG] Interesting thread on SEUL-EDU mailing list...
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| > The gold standard went away because it was *way* too difficult to do
| > business efficiently when the price of gold fluctuated drastically
| > on a regular basis. It caused tides of inflation and deflation that
| > moved much faster than anything we're used to.
|
| When the USA was on the gold standard, it was not possible for the price
| of gold to fluctuate in terms of dollars, because the definition of the
| dollar was in terms of gold. Ever hear of a 20 dollar gold coin? Before
| they began eliminating the gold standard, one could walk into virtually
| any bank and exchange between gold and paper dollars at a fixed rate. I
| believe it was 20 USD per ounce.
on a gold standard, the price of gold in terms of dollars is fixed.
on a gold standard, the price of cheesy-poofs in terms of dollars
is not fixed, and its price will fluctuate (possibly drastically)
based on the gold supply. (ie. the discovery of a new gold mine will
cause inflation (the price of cheesy-poofs goes up), the closing of
a mine will cause deflation (the price of cheesy-poofs goes down)).
--jeff
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