What is the Gold Standard?
Gold is one of the oldest forms of money used by individuals and societies. A gold standard is a monetary system where the money in circulation, often paper money, has a value directly linked to a store of gold. Currencies fixed to a gold standard also become fixed relative to each other, allowing predictable currency exchanges. The opposite of a gold standard currency is a fiat currency, meaning that central banks have the ability to increase or decrease the money supply without regard to any fixed standard. When economic historians refer to the gold standard, they are generally referring to the International Gold Standard established in the late 19th century. Precipitated by a silver currency crisis in England which culminated in the United States suspending all payments of silver, the International Gold Standard began in 1871 when a unified Germany established the Reichsmark as a strict gold standard currency. By 1900, virtually all global economic powers had followed suit. This ini
By Tarik Abdel-Monem The gold standard is a system in which international currencies are tied to a specific amount of gold. At the turn of the 20th century, many major trading nations used the gold standard to adjust their monetary supply. However, it was later abandoned in favor of Keynesian theories. Today, some commentators still advocate a return to the gold standard, but an examination of history would not support them. The Gold Standard in Theory The foundation of the gold standard is that a currency’s value is supported by some weight in gold. Inherently, it makes sense to value currency by some tangible and precious resource, otherwise, currency is just paper bills. Therefore, by tying paper money to an amount of gold, it gives the holder of the paper money the right to exchange her paper bills for actual gold. Ideally, this requires that paper money be readily exchangeable for gold. If a bank does not have gold, then the paper money has no value. But theoretically, actual gold
Planetair / myclimate’s project portfolio contains carbon offset certificates that carry the Gold Standard. Gold Standard carbon credits are the highest quality carbon credits currently available for voluntary offsets, and the projects they fund are the premium projects on the market. The method requires that renewable energy and energy efficiency technologies also lead to sustainable development for the local community (such as increased standards of living, knowledge transfer, job creation or pollution reduction). All Gold Standard projects are rigorously tested for environmental quality by registered third parties.
What is gold, and why is it so important? Is it still the basis that our modern monetary system rests on? First, a little history. Gold is thought to be one of the first known metals. The word “gold” came from an old English word geolo, meaning yellow. The ancient Egyptians were very proficient goldsmiths — hammering gold into leaf so thin that it took 367,000 leaves to make a one inch pile. Gold has been a valuable metal throughout the ages because it is scarce. It is a beautiful metal that has a lovely yellow color and a soft metallic glow. It is soft and easy to work with. It can be drawn into a fine wire, and as the Egyptians discovered, hammered into thin leaf. It is very malleable and can be easily shaped into various forms. It is highly resistant to rust and is corrosion-resistant.
