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:

Portugal 3200 Reis 1822 MS64 GOLD scarce High Grade
Portugal 3200 Reis 1822 MS64 GOLD scarce High Grade
$2,464.00
1925 GOLD 10 ZLOTYCH POLAND VERY SCARCE BRILLIANT UNC
1925 GOLD 10 ZLOTYCH POLAND VERY SCARCE BRILLIANT UNC
$353.00
1831 A GOLD 20 FRANCS FRANCE SCARCE BEAUTIFUL COIN
1831 A GOLD 20 FRANCS FRANCE SCARCE BEAUTIFUL COIN
$296.01
1899 GOLD 5 ROUBLE RUSSIA SCARCE SUPERB CONDITION
1899 GOLD 5 ROUBLE RUSSIA SCARCE SUPERB CONDITION
$210.00
2004 GOLD PANDA 1 10 Oz NGC MS69 50 Yn Yuan MS 69 CHINA 50Y SCARCE
2004 GOLD PANDA 1 10 Oz NGC MS69 50 Yn Yuan MS 69 CHINA 50Y SCARCE
$1,250.00
S AFRICA GV 1927 SA GOLD COIN SOVEREIGN  PCGS CERTIFIED GENUINE MS 63  SCARCE
S AFRICA GV 1927 SA GOLD COIN SOVEREIGN PCGS CERTIFIED GENUINE MS 63 SCARCE
$544.95
1888 Newfoundland Gold 2 NGC AU58 Scarce Coin 25000 Mintage
1888 Newfoundland Gold 2 NGC AU58 Scarce Coin 25000 Mintage
$575.00
Scarce 1926 CZECHOSLOVAKIA REPUBLIC GOLD DUKAT  LOOK PCGS MS 64  7745
Scarce 1926 CZECHOSLOVAKIA REPUBLIC GOLD DUKAT LOOK PCGS MS 64 7745
$799.00
Scarce TURKEY 1327 6 250 KURUSH GOLD COIN LOOK  8595
Scarce TURKEY 1327 6 250 KURUSH GOLD COIN LOOK 8595
$1,099.99
1978 GOLD 100 DINARS BAHRAIN SCARCE NGC PROOF 66 ULTRA CAMEO
1978 GOLD 100 DINARS BAHRAIN SCARCE NGC PROOF 66 ULTRA CAMEO
$2,580.00
TURKEY OTTOMAN  GOLD ZERI MAHBUB SULTAN MUSTAFA III 1171 AH  VA   SCARCE
TURKEY OTTOMAN GOLD ZERI MAHBUB SULTAN MUSTAFA III 1171 AH VA SCARCE
$199.99
EGYPT OTTOMAN  GOLD 5 PIASTRES SULTAN ABDUL AZIZ 1277 14 AH  NE   SCARCE
EGYPT OTTOMAN GOLD 5 PIASTRES SULTAN ABDUL AZIZ 1277 14 AH NE SCARCE
$99.99
1999 GOLD PANDA 100Y CHINA NGC MS69 SCARCE 1 Oz MS 69
1999 GOLD PANDA 100Y CHINA NGC MS69 SCARCE 1 Oz MS 69
$3,275.00
2000 Isle of Man Tri Gold Crown Scarce Free Shipping
2000 Isle of Man Tri Gold Crown Scarce Free Shipping
$1,499.00
2002 Switzerland 50 Francs Gold Coin 900 Scarce Free Shipping
2002 Switzerland 50 Francs Gold Coin 900 Scarce Free Shipping
$499.00
2001 Australia 150 Gold Floral Emblems Scarce Free Shipping
2001 Australia 150 Gold Floral Emblems Scarce Free Shipping
$750.00
1914 GOLD 20 MARK GERMANY UNIFORM SCARCE MINT STATE
1914 GOLD 20 MARK GERMANY UNIFORM SCARCE MINT STATE
$424.00
1831 B GOLD 20 FRANCS FRANCE SCARCE MINTMARK AUNC++
1831 B GOLD 20 FRANCS FRANCE SCARCE MINTMARK AUNC++
$374.00
1831 GOLD 20 FRANCS PARIS FRANCE SCARCE AUNC++
1831 GOLD 20 FRANCS PARIS FRANCE SCARCE AUNC++
$356.00
1223 GOLD 2 HAYRIYE ALTINTURKEY SCARCE 46 GRAMS FINE GOLD
1223 GOLD 2 HAYRIYE ALTINTURKEY SCARCE 46 GRAMS FINE GOLD
$248.00
1850 GOLD 20 FRANCS FRANCE SCARCE TYPE SECOND REPUBLIC
1850 GOLD 20 FRANCS FRANCE SCARCE TYPE SECOND REPUBLIC
$298.00
1906 GOLD MEXICO 10 PESO SCARCE MINT STATE
1906 GOLD MEXICO 10 PESO SCARCE MINT STATE
$395.00
Colombia Ferdinand VII Gold 1818 NR JF Escudo NGC FINE DETAILS SCARCE KM 641
Colombia Ferdinand VII Gold 1818 NR JF Escudo NGC FINE DETAILS SCARCE KM 641
$210.00
SCARCE 1988 AUSTRALIA KANGAROO DOLLAR GOLD FILLED PENDANT 24 FIGARO CHAIN
SCARCE 1988 AUSTRALIA KANGAROO DOLLAR GOLD FILLED PENDANT 24 FIGARO CHAIN
$46.53
SCARCE HIGH GRADE Venetian Gold Ducat of Doge Lorenzo Priuli 1556 1559
SCARCE HIGH GRADE Venetian Gold Ducat of Doge Lorenzo Priuli 1556 1559
$795.00
1990 LD LARGE DATE 50Y Yuan GOLD PANDA 1 2 Oz NGC MS69 CHINA 50 Yn SCARCE
1990 LD LARGE DATE 50Y Yuan GOLD PANDA 1 2 Oz NGC MS69 CHINA 50 Yn SCARCE
$4,750.00
1882 GOLD 20 DINARA SERBIA SCARCE PCGS AU 53
1882 GOLD 20 DINARA SERBIA SCARCE PCGS AU 53
$540.00
Portugal Gold Coin 2000 Reis 1859 King Petrus V very scarce
Portugal Gold Coin 2000 Reis 1859 King Petrus V very scarce
$315.00
Portugal Gold Coin D JOHN V CRUZADO 480 REIS 1734 SCARCE
Portugal Gold Coin D JOHN V CRUZADO 480 REIS 1734 SCARCE
$220.00
Portugal Gold Coin D JOHN V CRUZADO 480 REIS 1741 SCARCE
Portugal Gold Coin D JOHN V CRUZADO 480 REIS 1741 SCARCE
$215.00
Portugal Gold Coin D JOHN V CRUZADO 480 REIS 1746 SCARCE
Portugal Gold Coin D JOHN V CRUZADO 480 REIS 1746 SCARCE
$215.00
BRITAIN UK GEORGE II GOLD FULL GUINEA 1758 ANACS NOT PCGS VERY FINE 25 SCARCE
BRITAIN UK GEORGE II GOLD FULL GUINEA 1758 ANACS NOT PCGS VERY FINE 25 SCARCE
$1,200.00
SH1322 MS65 Iran Gold Pahlavi Key Date 1943 Persia UNC KM 1148 Scarce date
SH1322 MS65 Iran Gold Pahlavi Key Date 1943 Persia UNC KM 1148 Scarce date
$549.00
1788 GOLD 1 ESCUDO SPAIN MADRID SCARCE VERY NICE
1788 GOLD 1 ESCUDO SPAIN MADRID SCARCE VERY NICE
$268.00
1877 GOLD 20 FRANCS BELGIUM SCARCE BRILLIANT UNCIRCULATED
1877 GOLD 20 FRANCS BELGIUM SCARCE BRILLIANT UNCIRCULATED
$296.00
SCARCE 1897 RUSSIA 75  RUBLES GOLD COIN IMPERIAL RUSSIAN NICHOLAS II EMPIRE
SCARCE 1897 RUSSIA 75 RUBLES GOLD COIN IMPERIAL RUSSIAN NICHOLAS II EMPIRE
$685.99
SCARCE 1903 P UNC MS RUSSIA 5 ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS RUBLE
SCARCE 1903 P UNC MS RUSSIA 5 ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS RUBLE
$339.99
Scarce 1983 5 Yuan China Gold Panda 1 20 oz 999 Pure Gold Grading CH BU
Scarce 1983 5 Yuan China Gold Panda 1 20 oz 999 Pure Gold Grading CH BU
$500.00
1998 GOLD PANDA NGC MS69 1 4 Oz CHINA 25Y 25 YUAN YN KEY DATE VERY SCARCE
1998 GOLD PANDA NGC MS69 1 4 Oz CHINA 25Y 25 YUAN YN KEY DATE VERY SCARCE
$4,750.00
SCARCE 1898  RUSSIA 5 ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS II 5 RUBLE
SCARCE 1898 RUSSIA 5 ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS II 5 RUBLE
$264.99



List Of Recently Purchased Gold Scarce:


portugal 3200 reis 1822 ms64 gold scarce high grade, 1925 gold 10 zlotych poland very scarce brilliant unc, 1831a gold 20 francs france scarce beautiful coin, 1899 gold 5 rouble russia scarce superb condition, 2004 gold panda 110 oz ngc ms69 50yn yuan ms69 china 50y scarce, s africa gv 1927 sa gold coin sovereign pcgs certified genuine ms 63 scarce, 1888 newfoundland gold $2 ngc au58 scarce coin 25000 mintage, scarce 1926 czechoslovakia republic gold dukat look pcgs ms 64 7745, scarce turkey 13276 250 kurush gold coin look 8595, 1978 gold 100 dinars bahrain scarce ngc proof66 ultra cameo, turkey ottoman gold zeri mahbub sultan mustafa iii 1171 ah va scarce , egypt ottoman gold 5 piastres sultan abdul aziz 1277 14 ah ne scarce, 1999 gold panda 100y china ngc ms69 scarce 1 oz ms69 , 2000 isle of man tri gold crown scarce free shipping, 2002 switzerland 50 francs gold coin 900 scarce free shipping, 2001 australia $150 gold floral emblems scarce free shipping, 1914 gold 20 mark germany uniform scarce mint state, 1831b gold 20 francs france scarce mintmark aunc, 1831 gold 20 francs paris france scarce aunc, 1223 gold 2 hayriye altinturkey scarce 46 grams fine gold, 1850 gold 20 francs france scarce type second republic, 1906 gold mexico 10 peso scarce mint state, colombia ferdinand vii gold 1818 nrjf escudo ngc fine details scarce km 641, scarce 1988 australia kangaroo dollar gold filled pendant 24 figaro chain, scarce high grade venetian gold ducat of doge lorenzo priuli 15561559, 1990 ld large date 50y yuan gold panda 12 oz ngc ms69 china 50yn scarce , 1882 gold 20 dinara serbia scarce pcgs au53, portugal gold coin 2000 reis 1859 king petrus v very scarce, portugal gold coin d john v cruzado 480 reis 1734 scarce, portugal gold coin d john v cruzado 480 reis 1741 scarce, portugal gold coin d john v cruzado 480 reis 1746 scarce, britain uk george ii gold full guinea 1758 anacs not pcgs very fine 25 scarce, sh1322 ms65 iran gold pahlavi key date 1943 persia unc km 1148 scarce date, 1788 gold 1 escudo spainmadrid scarce very nice, 1877 gold 20 francs belgium scarce brilliant uncirculated, scarce 1897 russia 75 rubles gold coin imperial russian nicholas ii empire, scarce 1903 p unc ms russia 5 rouble gold coin imperial russian nicholas ruble, scarce 1983 5 yuan china gold panda 120 oz 999 pure gold grading ch bu, 1998 gold panda ngc ms69 14 oz china 25y 25yuan yn key date very scarce , scarce 1898 russia 5 rouble gold coin imperial russian nicholas ii 5 ruble, 1923 mexico gold 50 pesos uncirculated centenario scarce early date 12 oz, australia gv 1918 p gold coin sovereign ngc certified genuine ms 61 scarce, 1991p 10y proof gold panda pcgs pf68 pr68 china 10yn 10yuan scarce , 1926 bulgaria gold 4 dukat scarce and looks to be au condition, 1765c germany saxony gold pfennig km 980 ngc ms61 scarce gold pattern, scarce 1923 87 100 kur turkish gold coin look pcgs secure ms 66 7792, france 1851 a 2nd republic 10 francs gold coin 2year type scarce , netherlands 1912 wilhelmina gold 5 gulden unc one year type scarce , 1965 isle of man first gold sovereign bicentennial of the revestment act scarce, 1966 cyprus full sovereign gold coin archbishop makarios unc scarce, mauritius 1000 rupees 2000 gold pcgs pr69dcam mtg300 only scarce coin , spain colonial columbia doubloon 121248 escudos gold set scarce ac910, niger 25 francs essai gold 1960 pcgs pr62 scarce coin , australia 1866 victoria gold sovereign ngc ms61 scarce in mint state, mexico 4 reales 1856 pimc fvf silver km3758 light gold hues scarce type, 1986 gold chinese panda 100y yn yuan g100y china ngc ms69 scarce 1 oz 100y, 2002 chinese gold panda 110 oz china 50y 50y yuan bent scarce , 2004 australia colored monkey tenth 110 oz gold scarce coin gem bu, switzerland 1935 b no l gold coin 20 francs ngc cert genuine ms 63 scarce, 1944 mexico 50 pesos 12 oz gold coin pcgs ms65 ms65 scarce date , 1828 gold 20 lire italy sardinia very scarce ngc xf45, 1810 gold 20 francs france napoleon emperor scarce, 1895sgold 10 dollar usa scarce date only 49000 minted, 1975 gold 500 dollars singapore scarce 1 ounce gold, 1830 genoa gold 80 lire italy sardinia scarce ngc xf45, 1960 india bombay scarce gold elephant tola 5 grammes coin pcgs ms63, 1904 gold 5 rouble russia scarce uncirculated, 1944 romania 20 lire gold ngc ms64 high grade and scarce this nice, 2002 gold panda 14 oz ngc ms68 100y ms68 china 100y scarce , ottoman egypt gold zeri mahbub of mahmud i 11431168 ah 17301754 ad scarce, details about 1901 cyprus 18 piastres super scarce sterling silver coin , 1907 cyprus 18 piastres km 10 sterling silver scarce coin vf, 1952 1977 proof silver jubilee 999 silver medal w gold plating scarce, 1914 mexico revolutionary guerrero 1 peso goldsilver scarce, mexico gold 18564 mo gf 12 escudo overdate ngc au details scarce km 3785, scarce 1897 russia 5 rouble gold coin imperial russian nicholas ii 5 ruble, scarce 1994 5 y pure gold china unicorn 120oz ngc pf67 uc $18888, scarce 1997 5yuan gold china panda lg date mirror pcgsms69 $24888, 2006 mint colored 110 oz gold dog coin scarce austraila lunar series 1 gem, 1911 russia 10 rouble gold coin ngc unc scarce date, sweden 1874 st gold coin 20 kronor ngc certified genuine ms 63 mega scarce, gem prf gold coin belize 1976 fm $100 ancient mayan symbols km52 scarce, 1884 gold 20 drachmai greecescarce ngc ms63, 1897 gold 7 12 rouble russia scarce superb condition, 1327 gold 250 kurushturkey very scarce issue only 6878 minted , 1869bb gold 100 francsfrance very scarce superb condition, 1925 gold 20 zlotych poland very scarce pcgs ms63, 1968 gold 150 bath thailand scarce brilliant unc , 1873 gold 10 mark germanybaden very scarce, 1892 gold 20 francs tunisia very scarce ngc au55, russia 1896 staron rim 50 kscarce ngc xf45 low mintage bluegold tonning , 1968 gold 300 bath thailand very scarce brilliant unc, 19161335 gold 100 piastres egypt very scarce issue uncirculated, scarce gold cob 1 escudo nuevo reino colombia, 1899s morgan silver dollar better grade original scarce date coin circulated, scarce 1962 south african gold coin set, 1843 great britain gold half sovereign low mintage and scarce



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