Quote:
Originally Posted by Seaver
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.
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i know - but current spike in gold is attributed to dollar and euro weakness...as a hedge against it, which doesnt make sense.. and if currency isnt pegged to a "real" security, what stops govts from simply printing more to repay debts, or to secretly buy up assets overseas ..since its worth just the paper and no one can scrutinize the internal workings of a govt. ? it also muddies up trade, have a tech background but everything can be traced by logic..but this seems to be illogical.. especially the quantitative easing and supposed currency wars.. - if it meant anything real, the scope to manipulate it is greatly reduced to less feasible ways. ..