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what i am trying to resolve is how are currency values arrived at - and whether gold is relevant still - why are incredibly smart bankers and countries..i assume filled with rooms of people smarter or atleast who give more thought to this still running with gold... and allowing the US currency to stay steady when its being diluted all the time plus has weak fundamentals... i beleive it might be that institutions and countries sitting on stock piles of euros and dollars are trying to find as many suckers as they can to offload and minimize their losses ??
Read more: http://www.tfproject.org/tfp/tilted-...#ixzz18ipZvdVK
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Almost no industrialized nation attaches their currency to gold. The reason is a gold fluctuation could ruin an economy that is otherwise running fine. By controlling their own money, a government can in real time decide the import/export percentage of it's economy. In addition, a terrible crash can immediately spurn global investment akin to Mexico in the mid '90s. They almost had a governmental collapse, their peso dropped almost overnight to 1/4 it's original value. This caused enormous investment from America and Europe to take advantage of the value and started industrial parks which very quickly brought the Peso back up and restarted the economy.
If it had been tied to Gold they probably would have lost the entire government as there would not have been enough to replace the peso/gold oz. scramble. Their exports would have stayed extremely expensive and imports would have ground to a halt.