How critical is gold in defining a countrys economic status?
more forex reserves (both gold and dollars) is useful in keeping the domestic currency high, or as collateral for borrowing, so it indeed has a bit of a positive impact. It is not critical though, educated and hard-working workers matter much more, as is the smart and responsible government. Back in middle ages, Spain made hoarding gold the primary goal of its economic policy; it resulted in sharp economic decline: http://en.citizendium.org/wiki/Mercantil… I know gold is popular in India, but this is a cultural thing, not an economic one.
