Gold standard

                          Gold standard

Gold standard - a monetary system in which cash can be freely exchanged for gold

Gold standard - a monetary system that existed previously in some countries, in which the gold acted as a universal equivalent and immediate basis of monetary circulation. The basic form of the gold standard was the gold standard, which is characterized by the unlimited coinage and circulation of coins and gold and the free exchange them for paper money.

Gold standard - a monetary system in which the basic unit of calculation is a standardized amount zolota.V economy, built on the basis of the gold standard, it is guaranteed that each issued currency could on demand be exchanged for a corresponding amount of gold. When calculations between states, using the gold standard set fixed exchange rate based on the ratio of these rates per unit mass gold.

Gold Standard - a monometallic monetary system that existed in many countries at a certain stage of development of capitalism, in which only gold is the universal equivalent and immediate basis of monetary circulation.

Gold Standard - a former monetary system, where a unit of the national currency of a country had a fixed gold content. With this system, the currency freely accessed in gold, Smooth Function permitted the export and import of gold. In the UK, the gold standard existed since the beginning of the 19th century. until 1931. Most of the countries soon after this also ceased to peg their currencies to the gold price.

Gold Standard - a system to establish exchange rates (exchange rates) by the central bank or the government of each country in such a way that the national currency is freely exchanged for gold at a fixed price.

Gold standard - a monetary system established at the end of the 19th century. in many countries, in which only gold is the universal equivalent and immediate basis of monetary circulation. The classical form of the gold standard was a gold coin standard, characterized by unlimited coinage and circulation of gold coins and free them by exchanging paper money.

Gold standard - a monetary system in which cash can be freely exchanged for gold. The ratio between the amount of gold and currency unit established by law.

The concept and essence of the gold standard

Official calling this system was at a conference in Paris in 1821 Basis - gold, for which legislate the role of the main forms of money. The national currency is rigidly tied to gold and in gold content of the currency concerned with each other at a fixed rate; deviation from the fixed exchange rate were negligible (less than +/- 1%) and were within the "golden point" -maximal deviations exchange rate of the established parity is determined by the cost of transporting gold abroad.

Gold Standard - currency relations system in which each country expressed the value of its currency in a certain amount of gold, and the central banks or the government had to buy and sell gold at a fixed price.

Gold standard system is based on a few simple principles:

- Each currency was determined by the weight of gold. England applied this principle since the 1816 US - since 1837, Germany - since 1875, and France, which in 1803 elected a bimetallic silver-gold system - since 1878

- Each currency convertibility into gold was provided both inside and outside national borders. Issuing institutions exchanged bank paper gold coins and gold bullion was converted to coins. Under these conditions, emission Institute could not allow himself to produce ingots excluding the volume of its gold reserves.

- Bullion freely exchanged for coins; gold freely imported and exported on the broad international markets. Thus, the gold and foreign exchange markets are interdependent.

"Gold Standard" originated with the start of the care of a bimetallic system, and ceased to exist in the first month of World War II. The era of the gold standard is sometimes associated with rapid industrialization and economic prosperity.

Getting the gold standard was initiated by the Bank of England in 1821, the system was legally framed intergovernmental agreement at the Paris Conference in 1867, which recognized the gold the only form of world money. This system is also called as the Paris monetary system at the place of execution of the agreement.

The history of the emergence and development of the gold standard

Earlier monetary system based on bronze, and later on silver (Silver Standard). Pure silver standard existed in Central Europe in the VIII-XIV centuries. With the increase in the volume of trade transactions as means of payment are increasingly began to use gold. Since the XV century bimetallism established fixed exchange silver for gold. Due to the gradual change in metal prices, the exchange rate had to be reviewed. However, to give up the need to have prevented bimetallism silver small bargaining chip. Remove this obstacle was possible only in the XIX century, with the transition to paper money and coins from precious metals.

Some historians date the beginning of the era of the gold standard by the end of the Hundred Years War. The use of gold in the international operations was confirmed by the Research Committee, composed of government officials mints, convened by the Government of Genoa between 1445 and 1446 and stabilize the exchange rate of gold florins on the basis of the value of forty-four salts. However, the official birth of the gold standard as a legal institution should be attributed to the 1819 This year the British Parliament passed the Recovery Act. This title he wore because oblige the Bank of England to restore the interrupted four years after the beginning of the Napoleonic Wars (1799-1815 gg.), The practice of exchanging banknotes on demand for gold at a fixed rate. In 1875, the UK joined to Germany. France began using the gold standard since 1878 has acted gold-silver bimetallic system Up to this time in France. A year later, the United States also joined the gold standard in 1879. And in 1900, American law on the gold standard institutionalize Us dollar and gold.

The main reasons for choosing gold as the standard monetary unit:

- Relatively high cost,

- Durability, immutability during storage,

- Divisibility and associations,

- The ability to identify the color, weight, viscosity, acoustic properties.