Gold Scarce

can someone help me on a question about the gold standard?

Examine the Gold-Exchange standard. Why was it established? Discuss the role of the Great Depression and the post-1914 world monetary order. Why did the Gold-Exchange Standard fail?

the web page (below) answers the question: What are the main Features, Merits and Demerits of Gold Exchange Standard?

Gold exchange standard refers to a system in which there is neither a gold currency in circulation not gold reserves held for external purposes.

Under this system, the domestic currency of a country (which is composed of token coins and paper notes) is not converted into gold for meeting internal needs, but is converted into the currency of some foreign payments.

The external value of the domestic currency unit is determined in terms of the foreign currency. Thus, under gold exchange standard, the domestic currency has no direct link with gold; it is linked at a fired exchange rate with the currency of another country which is convertible into gold.

In addition to gold reserves, the monetary authority of the country maintains sufficient amount of foreign exchange reserves for making international payments.

Gold exchange standard is a cheaper form of gold standard particularly suitable for the underdeveloped or gold-scarce countries.

It was first adopted by Holland in 1877 and then by Austria, Hungry, Russia and India during the last decade of the 19th century. India abandoned this standard in 1926 on the recommenda­tions of the Hilton Young Commission.

Features

(i) The domestic currency is made of token coins and Paper Money. Gold coins are not in circulation.

(ii) The domestic currency is not convertible into gold but is convertible at the fixed rate into the currency of the other country based on the gold standard.

(iii) There is no direct link between the volume of domestic currency and the gold reserves.

(iv) Foreign exchange and foreign bills along with gold constitutes the reserve base of a country.

(v) The gold market is regulated and controlled by the government. There is no free import and export of gold.

(vi) Gold is used neither as a medium of exchange nor as a measure of value. But prices of all goods and services are indirectly determined by the price of gold.

(vii) Foreign payments are made either in gold or in currency based on gold.

Merits

The gold exchange standard enjoys the following advantages:

1. Economical:

Gold exchange standard is cheaper and economical. It economies the use of gold in two ways: (a) it avoids the wastage of gold because of non-circulation of gold coins: (b) the government need not keep gold reserves for converting domestic currency into gold.

2. Elastic money Supply:

Since the domestic currency is not backed by gold reserves, the monetary authority can easily, expand money supply to meet the increasing needs of trade and industry.

3. Exchange Stability:

Under gold exchange standard, it is the responsibility of the government to maintain the stability of exchange rate. Exchange stability is essential for the promotion of foreign trade.

4. Gains to Government:

The government of the country also gains from this standard: (a) It earns interest on the reserves kept in the foreign country; (b) It also keeps some margin between the buying and selling of foreign exchange.

5. Gains of Gold Standard:

All the advantages of the gold standard become available under this standard without putting gold coins in circulation.

6. Suitable for poor Countries:

This standard is particularly suited to the less developed countries with gold scarcity.

Demerit

The gold exchange standard has the following drawbacks:

1. Complex:

This standard is complex in its working and is not easily understandable by the common people.

2. Less Public Confidence:

Under this standard, domestic currency is not directly linked with gold and the currency is not convertible into gold. Therefore, it does not inspire much public confidence.

3. Not Automatic:

This standard does not work automatically and needs active government intervention. It may be more appropriately called a managed standard.

4. Inflation-Oriented:

Under this system, money supply can be increased easily but it is very difficult to reduce money supply. Hence it is prone to inflation.

5. Expensive:

This system is not economical. To make it work, the government has to keep many reserves which involve lot of expenditure. It is due to its expensive nature that India abandoned this system on the recommendations of Hilton Young Commission.

6. Monetary Dependence:

Under this standard, the monetary independence of a country cannot adopt an independent monetary policy but has to be governed by the policy of the foreign countries.

7. External Insecurity:

Since, under this standard, the domestic currency of a country is linked with the foreign currency, the insecurity and instability of the foreign currency makes the monetary system of the related country insecure and unstable.

Find Popular Gold Scarce At eBay Below:

Australia 1904 Perth Half Sovereign  VF SCARCE
Australia 1904 Perth Half Sovereign VF SCARCE
$199.99
RUSSIA 1896   STARON RIM 50 KSCARCE NGC XF45 LOW MINTAGE BLUE GOLD TONNING
RUSSIA 1896 STARON RIM 50 KSCARCE NGC XF45 LOW MINTAGE BLUE GOLD TONNING
$275.00
1882 GOLD 10 DINARA SERBIA VERY SCARCE GEM UNCIRCULATED
1882 GOLD 10 DINARA SERBIA VERY SCARCE GEM UNCIRCULATED
$228.00
1223 GOLD 2 HAYRIYE ALTINTURKEY SCARCE 46 GRAMS FINE GOLD
1223 GOLD 2 HAYRIYE ALTINTURKEY SCARCE 46 GRAMS FINE GOLD
$248.00
Netherlands 1806 Gold Ducat Scarce Large Date Variety Nice Coin PCGS XF details
Netherlands 1806 Gold Ducat Scarce Large Date Variety Nice Coin PCGS XF details
$375.00
1858 Vatican Pope Pius IX Beautiful Gold 2 Scudi 250 Coin NGC MS 62 Scarce
1858 Vatican Pope Pius IX Beautiful Gold 2 Scudi 250 Coin NGC MS 62 Scarce
$458.00
1868R XXII Vatican Gold 20 Lire MS63 NGC Nice and scarce in BU Tiny mintage
1868R XXII Vatican Gold 20 Lire MS63 NGC Nice and scarce in BU Tiny mintage
$1,125.00
Belgium 1875 Gold 20 Francs NGC MS 65 Scarce 8 Year Issue Sharp Lustrous Lo Mn
Belgium 1875 Gold 20 Francs NGC MS 65 Scarce 8 Year Issue Sharp Lustrous Lo Mn
$275.00
British India 1918 I Gold Sovereign NGC MS 64 Scarce One Year Type Low Minimum
British India 1918 I Gold Sovereign NGC MS 64 Scarce One Year Type Low Minimum
$362.00
Italy Kingdom 1865 Gold 20 Lira NGC MS 63 Sharp Lustrous Scarce Low Minimum
Italy Kingdom 1865 Gold 20 Lira NGC MS 63 Sharp Lustrous Scarce Low Minimum
$260.00
Italy Kingdom 1882 Gold 20 Lira NGC MS 63 Sharp Lustrous Scarce Low Minimum
Italy Kingdom 1882 Gold 20 Lira NGC MS 63 Sharp Lustrous Scarce Low Minimum
$250.00
South Africa ZAR 1892 Gold Pond NGC XF 45 Double Shaft Scarce Low Mintage
South Africa ZAR 1892 Gold Pond NGC XF 45 Double Shaft Scarce Low Mintage
$500.00
Sweden 1874 Gold 10 Kronor NGC MS 65 Scarce 2nd Year of Issue Sharp Lustrous
Sweden 1874 Gold 10 Kronor NGC MS 65 Scarce 2nd Year of Issue Sharp Lustrous
$195.00
1915 AUSTRIAN GOLD COIN 20 CORONAS FRANS JOSEPH SCARCE VERY NICE
1915 AUSTRIAN GOLD COIN 20 CORONAS FRANS JOSEPH SCARCE VERY NICE
$300.00
1877 GOLD 20 FRANCS BELGIUM SCARCE UNCIRCULATED 645 GRAMS
1877 GOLD 20 FRANCS BELGIUM SCARCE UNCIRCULATED 645 GRAMS
$298.00
1992 CHINA 10 YUAN 1 10 TROY OZ 999 GOLD PANDA COIN NGC MS 69 LARGE DATE SCARCE
1992 CHINA 10 YUAN 1 10 TROY OZ 999 GOLD PANDA COIN NGC MS 69 LARGE DATE SCARCE
$329.00
1912 GOLD DUCAT AUSTRIA VERY SCARCE DATE UNCIRCULATED
1912 GOLD DUCAT AUSTRIA VERY SCARCE DATE UNCIRCULATED
$324.00
1777P SF Colombia Gold Escudo Scarce Popayan Mint KM 482 NGC VF35
1777P SF Colombia Gold Escudo Scarce Popayan Mint KM 482 NGC VF35
$350.00
1794 GOLD GUINEA GREAT BRITAIN VERY SCARCE PCGS XF 40
1794 GOLD GUINEA GREAT BRITAIN VERY SCARCE PCGS XF 40
$970.00
1868 A GOLD 10 FRANCS FRANCE SCARCE LAUREATE HEAD
1868 A GOLD 10 FRANCS FRANCE SCARCE LAUREATE HEAD
$178.00
SCARCE 2007 Australia PIG lunar 10th 1 10 oz GOLD COLORIZED coin GEM BU
SCARCE 2007 Australia PIG lunar 10th 1 10 oz GOLD COLORIZED coin GEM BU
$307.00
1834 A GOLD 40 FRANCS FRANCE SCARCE DATE SUPERB COIN
1834 A GOLD 40 FRANCS FRANCE SCARCE DATE SUPERB COIN
$629.00
1833 A GOLD 40 FRANCSFRANCE SCARCE DATE AUNC++
1833 A GOLD 40 FRANCSFRANCE SCARCE DATE AUNC++
$680.00
1922 GOLD 100 PIASTRES EGYPT VERY SCARCE GEM UNCIRCULATED
1922 GOLD 100 PIASTRES EGYPT VERY SCARCE GEM UNCIRCULATED
$680.00
GOLD COAST TACKOE 1796 SILVER VF VERY SCARCE
GOLD COAST TACKOE 1796 SILVER VF VERY SCARCE
$599.00
1850 GOLD 20 FRANCS FRANCE SCARCE TYPE SECOND REPUBLIC
1850 GOLD 20 FRANCS FRANCE SCARCE TYPE SECOND REPUBLIC
$298.00
Scarce 1962 South African Gold Coin Set
Scarce 1962 South African Gold Coin Set
$949.00
1970 Bhutan 1S Sertum Gold Coin ANACS MS 66 GEM Scarce
1970 Bhutan 1S Sertum Gold Coin ANACS MS 66 GEM Scarce
$595.00
Scarce 1904 10 Korona gold coin from Hungary  High Grade Coin
Scarce 1904 10 Korona gold coin from Hungary High Grade Coin
$195.00
1 4 PAHLAVI SCARCE C 2537 OR 1978 VERY RARE 900 PURE GOLD PERSIAN COIN
1 4 PAHLAVI SCARCE C 2537 OR 1978 VERY RARE 900 PURE GOLD PERSIAN COIN
$575.00
Scarce 1926 CZECHOSLOVAKIA REPUBLIC GOLD DUKAT  LOOK PCGS MS 64  7745
Scarce 1926 CZECHOSLOVAKIA REPUBLIC GOLD DUKAT LOOK PCGS MS 64 7745
$799.99
1870 Australian Gold Sovereign TYPE II Scarce NGC AU58
1870 Australian Gold Sovereign TYPE II Scarce NGC AU58
$700.00
1797 GOLD GUINEA GREAT BRITAIN VERY SCARCE PCGS AU 50
1797 GOLD GUINEA GREAT BRITAIN VERY SCARCE PCGS AU 50
$1,090.00
1835 GOLD 20 LIRE ITALY SARDINIA SCARCE EARLY DATE
1835 GOLD 20 LIRE ITALY SARDINIA SCARCE EARLY DATE
$313.00
1293 GOLD 100 KURUSHTURKEY SCARCE 72 GRAM
1293 GOLD 100 KURUSHTURKEY SCARCE 72 GRAM
$420.00
1837 GREAT BRITAIN KING WILLIAM IV GOLD SOVEREIGN SCARCE PCGS XF 40
1837 GREAT BRITAIN KING WILLIAM IV GOLD SOVEREIGN SCARCE PCGS XF 40
$875.00
SH1338 MS63 Iran 1 2 Gold Pahlavi KM 1161 1960 Persia UNC Scarce
SH1338 MS63 Iran 1 2 Gold Pahlavi KM 1161 1960 Persia UNC Scarce
$329.00
1910 France 20 Francs SCARCE HIGH GRADE GOLD Coin SCARCE FRENCH GOLD ROOSTER
1910 France 20 Francs SCARCE HIGH GRADE GOLD Coin SCARCE FRENCH GOLD ROOSTER
$779.99
Scarce Egypt Gold Coin 1923 AD 1341 AH Twenty Piastre King Fuad I Bust Right Unc
Scarce Egypt Gold Coin 1923 AD 1341 AH Twenty Piastre King Fuad I Bust Right Unc
$550.00
1911 Russia 10 Rouble Gold coin NGC UNC Scarce date
1911 Russia 10 Rouble Gold coin NGC UNC Scarce date
$595.00



List Of Recently Purchased Gold Scarce:


australia 1904 perth half sovereign vf scarce, russia 1896 staron rim 50 kscarce ngc xf45 low mintage bluegold tonning , 1882 gold 10 dinara serbia very scarce gem uncirculated, 1223 gold 2 hayriye altinturkey scarce 46 grams fine gold, netherlands 1806 gold ducat scarce large date variety nice coin pcgs xf details, 1858 vatican pope pius ix beautiful gold 2 scudi 250 coin ngc ms 62 scarce, 1868r xxii vatican gold 20 lire ms63 ngc nice and scarce in bu tiny mintage, belgium 1875 gold 20 francs ngc ms65 scarce 8 year issue sharp lustrous lo mn, british india 1918 i gold sovereign ngc ms64 scarce one year type low minimum, italy kingdom 1865 gold 20 lira ngc ms63 sharp lustrous scarce low minimum, italy kingdom 1882 gold 20 lira ngc ms63 sharp lustrous scarce low minimum, south africa zar 1892 gold pond ngc xf45 double shaft scarce low mintage , sweden 1874 gold 10 kronor ngc ms65 scarce 2nd year of issue sharp lustrous, 1915 austrian gold coin 20 coronas frans joseph scarce very nice, 1877 gold 20 francs belgium scarce uncirculated 645 grams, 1992 china 10 yuan 110 troy oz 999 gold panda coin ngc ms 69 large date scarce, 1912 gold ducat austria very scarce date uncirculated, 1777p sf colombia gold escudo scarce popayan mint km 482 ngc vf35, 1794 gold guinea great britain very scarce pcgs xf40, 1868a gold 10 francs france scarce laureate head, scarce 2007 australia pig lunar 10th 110 oz gold colorized coingem bu , 1834a gold 40 francs france scarce date superb coin, 1833a gold 40 francsfrance scarce date aunc, 1922 gold 100 piastres egypt very scarce gem uncirculated, gold coast tackoe 1796 silver vf very scarce, 1850 gold 20 francs france scarce type second republic, scarce 1962 south african gold coin set, 1970 bhutan 1s sertum gold coin anacs ms66 gem scarce, scarce 1904 10 korona gold coin from hungary high grade coin , 14 pahlavi scarce c 2537 or 1978 very rare 900 pure gold persian coin, scarce 1926 czechoslovakia republic gold dukat look pcgs ms 64 7745, 1870 australian gold sovereign type ii scarce ngc au58, 1797 gold guinea great britain very scarce pcgs au50, 1835 gold 20 lire italy sardinia scarce early date, 1293 gold 100 kurushturkey scarce 72 gram , 1837 great britain king william iv gold sovereign scarce pcgsxf40, sh1338 ms63 iran 12 gold pahlavi km 1161 1960 persia unc scarce, 1910 france 20 francs scarce high grade gold coin scarce french gold rooster, scarce egypt gold coin 1923 ad 1341 ah twenty piastre king fuad i bust right unc, 1911 russia 10 rouble gold coin ngc unc scarce date, australia 1885 s sovereign shield gold ngc ms 62 scarce victoria young head, scarce 1952 south africa 1 pound world gold coin ch proof 12000 minted 2355 oz, china 1999 110 oz ounce 10 yuan gold panda scarce, india gold fanam scarce , 1930 gold 50 piastresegypt very scarce mint state , portugal gold coin john v quartinho 1000 1200 reis 1714 very scarce , 1882 gold 10 dinara serbia very scarce uncirculated, 1911c gold sovereign canada uncirculated scarce, sh1336 ms65 iran 12 gold pahlavi 1957 unc scarce persia km 1161, pcwpe1574pahlavi dynasty reza shah 19251941 gold one pahlavi scarce date, 1291 asia mongol ilkhanate arghun khan scarce gold dinar coin 438gm, morocco 5 franks ah 1347 a1927 ad scarce better date nice light gold tonning , 1765c germany saxony gold pfennig km 980 ngc ms61 scarce gold pattern, 187862 spain gold 10 pesetas ms63 ngc nice and scarce in bu tiny mintage, scarce 2006 australia lunar dog 10th ounce gold colorized coin gem bu, 2004 australia colorized monkey tenth 110 oz gold scarce coin gem bu, spain 1896 1962 gold 20 pesetas scarce, 2017 taniwha 1 oz gold proof coin maori art coin scarce, 1991 gibraltar gold corgi dog coin pobjoy mint 1 troy ounce scarce, 1991 gibraltar gold corgi dog coin pobjoy mint 125 troy ounce scarce, 1991 gibraltar gold corgi dog coin pobjoy mint 110 troy ounce scarce, scarce gold coin 20 pesetas of alfonso xiii spain year 1890 18 90, 1818 gold 20 lire italy sardinia very scarce ngc xf45, 13321913 gold half toman very scarce uncirculated, 1922 gold 100 piastres egypt scarce gem uncirculated, 1862t gold 20 lire italy very scarce 645 gr, england william iii 1700 av five guineas pcgs xf40 s3454 very scarce type, 1894 gold 10 korona hungary scarce date, bjstamps 1842 p sardinia 20l gold italy 900 gold 186 toz pcgs au 53 scarce, gold choice ch bu bermuda 1977 elizabeth ii scarce in its original mint folder, spain colonial columbia boubloon 121248 escudos gold set scarce ac910, 1831 gold 20 francs paris france scarce beautiful coin, scarce poland polish 1999 laski erasmus 2zl nordic gold coin nice, 1902 scarce old russia nicholas ii 10 rubles roubles gold coin free gift, scarce 2004 poland polish 2 zloty nordic gold coin wildlife porpoises pcgm 3, scarce poland polish 2005 pope john paul ii 2zl nordic gold coin pcgm nice, portugal 6400 reis gold queen d maria 1796 rio scarce date, portugal gold coin joannes vi pea 6400 reis 1824 only 1500 mintedvery scarce, portugal 6400 reis gold queen d maria and petrus iii 1786 rio scarce, portugal gold coin josephus i pea 6400 reis gold 1757 rio very scarce, china 1984 1 ounce 100 yuan gold panda ngc ms68 scarce, g5862 salzburg austria 14 ducat 1660 gold scarce thun v hohenstein 16541668, mexico gold 1891 mo m 1 peso ngc ms62 mexico mint746 pieces scarce km 4105, 2006 belarus swans 50 rubles proof gold coin scarce, a blazer swiss 1908 nice burare gem early date scarce pre wwone gold 20 franc, lustrous swiss 1911 nice burare gem early date scarcepre wwone gold 20 franc, swiss 1916 nice lustrous bua rare gem early date scarce near melt gold 20 franc, scarce gone with the wind 125 oz gold coin 1996 gibraltar proof nice, a blazer swiss 1910 nice burare gem early date scarce pre wwone gold 20 franc, a blazer swiss 1902 nice burare gem early date scarce pre wwone gold 20 franc, swiss 1914 nice lustrous bua rare gem early date scarce near melt gold 20 franc, romania 1906 12 12 lei pcgs ms60 km36 scarce one year type gold coin, 1900 gold 10 rouble russia scarce date uncirculated, 1817 gold half escudo spain scarce one year type, 1903 gold 5 rouble russia scarce mint state, 1876 gold 20 drachmai greece very scarce ngc xf45, 1928 gold 25 schilling austriascarce brilliant unc



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