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Gold/Mining/Energy : Gold Price Monitor

GDXJ 96.04

-1.4%

Nov 17 4:00 PM EST

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To: Hawkmoon who wrote (27438)	2/1/1999 1:32:00 AM
From: Gord Bolton	Read Replies (1) of 116762

Using a gold standard or printing money which may be redeemed for a specific quantity of gold does not limit the number of notes in circulation to the physical quantity of gold that a Government holds. The purpose of the notes is to facilitate trade and to act as a store of value. Things other than gold have value as well and may be valued in gold and credit or notes may be issued for such items. As it is unlikely that everyone holding a note would all appear on the same day to convert their notes to gold there is no need to have humungous mountains of gold to maintain a gold backed currency. The gold standard would more appropriately function as a discipline upon the folks who print the notes. THe fact that people who thought there was doubt about the notes could convert to gold would simply make the notes stronger. I'm certain that the volume of conversion would be monitored by many and appropriate adjustments would be made to maintain the balance. Your arguement that people can already convert their dollars to Euros to yen to reals and so one is fine as long as we don't have a situation where all paper currencies are deflating in comparison to real goods. AS you would be aware the conversion between currencies is closely monitored by many as it is. Central banks, governments, importers, exporters and so on are constantly making adjustments. Governments are constantly getting involved in the currencies because they are often amongst the largest borrowers and because the currency may fluctuate in relation to their perceived credibility, legitimacy, stability and so on. Having a gold backed currency would simply provide more stability to the marketplace and would limit the ability of governments to create undeclared taxation through currency devaluations.

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