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:

Minerva 35 Dollars 1973 Silver with Gold on Bust Scarce Issue
Minerva 35 Dollars 1973 Silver with Gold on Bust Scarce Issue
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Portugal Gold Coin 5000 Reis 1870 D Ludovicus I D Luis I Scarce date
Portugal Gold Coin 5000 Reis 1870 D Ludovicus I D Luis I Scarce date
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Mexico 4 Reales 1856 PiMC F VF silver KM3758 Light Gold Hues Scarce Type
Mexico 4 Reales 1856 PiMC F VF silver KM3758 Light Gold Hues Scarce Type
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SCARCE 1897  RUSSIA 5 ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS II 5 RUBLE
SCARCE 1897 RUSSIA 5 ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS II 5 RUBLE
$264.99
1877 GOLD 20 FRANCS BELGIUM SCARCE BRILLIANT UNCIRCULATED
1877 GOLD 20 FRANCS BELGIUM SCARCE BRILLIANT UNCIRCULATED
$296.00
SCARCE 1808 A GOLD 20 FRANCS FRANCE NAPOLEON I
SCARCE 1808 A GOLD 20 FRANCS FRANCE NAPOLEON I
$388.00
China 1984 1 Ounce 100 Yuan Gold Panda NGC MS68 Scarce
China 1984 1 Ounce 100 Yuan Gold Panda NGC MS68 Scarce
$1,798.00
1773 GOLD HALF ESCUDO SPAIN MADRID SCARCE
1773 GOLD HALF ESCUDO SPAIN MADRID SCARCE
$218.00
1869 BB GOLD 100 FRANCSFRANCE VERY SCARCE SUPERB CONDITION
1869 BB GOLD 100 FRANCSFRANCE VERY SCARCE SUPERB CONDITION
$2,150.00
1327 GOLD 250 KURUSHTURKEY VERY SCARCE ISSUE ONLY 6878 MINTED
1327 GOLD 250 KURUSHTURKEY VERY SCARCE ISSUE ONLY 6878 MINTED
$1,530.00
1255 151853 GOLD 100 QIRSHEGYPT VERY SCARCE NGC AU 53
1255 151853 GOLD 100 QIRSHEGYPT VERY SCARCE NGC AU 53
$580.00
UNC  ALFONSO XII  25 Pesetas 1883  Stars 18 83 Gold SCARCE
UNC ALFONSO XII 25 Pesetas 1883 Stars 18 83 Gold SCARCE
$999.00
OTTOMAN EGYPT GOLD ZERI MAHBUB OF MAHMUD I 1143 1168 AH 1730 1754 AD SCARCE
OTTOMAN EGYPT GOLD ZERI MAHBUB OF MAHMUD I 1143 1168 AH 1730 1754 AD SCARCE
$395.00
Details about 1901 CYPRUS 18 Piastres SUPER SCARCE STERLING SILVER COIN
Details about 1901 CYPRUS 18 Piastres SUPER SCARCE STERLING SILVER COIN
$120.00
1907 Cyprus 18 Piastres KM 10 Sterling Silver Scarce Coin VF
1907 Cyprus 18 Piastres KM 10 Sterling Silver Scarce Coin VF
$349.00
1911 Russia 10 Rouble Gold coin NGC UNC Scarce date
1911 Russia 10 Rouble Gold coin NGC UNC Scarce date
$575.00
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
$275.00
SCARCE 1897 RUSSIA 75  ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS II EMPIRE
SCARCE 1897 RUSSIA 75 ROUBLE GOLD COIN IMPERIAL RUSSIAN NICHOLAS II EMPIRE
$684.99
EGYPT OTTOMAN  GOLD 100 PIASTRES SULTAN ABDUL AZIZ 1277 7 AH  VAC   SCARCE
EGYPT OTTOMAN GOLD 100 PIASTRES SULTAN ABDUL AZIZ 1277 7 AH VAC SCARCE
$799.99
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
$220.00
1894 GOLD 10 KORONA HUNGARY SCARCE DATE
1894 GOLD 10 KORONA HUNGARY SCARCE DATE
$178.00
1911 C GOLD SOVEREIGN CANADA UNCIRCULATED SCARCE
1911 C GOLD SOVEREIGN CANADA UNCIRCULATED SCARCE
$374.00
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
Scarce 1926 CZECHOSLOVAKIA REPUBLIC GOLD DUKAT  LOOK PCGS MS 64  7745
Scarce 1926 CZECHOSLOVAKIA REPUBLIC GOLD DUKAT LOOK PCGS MS 64 7745
$799.99
1777P SF Colombia Gold Escudo Scarce Popayan Mint KM 482 NGC VF35
1777P SF Colombia Gold Escudo Scarce Popayan Mint KM 482 NGC VF35
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EGYPT OTTOMAN  GOLD 5 PIASTRES SULTAN ABDUL AZIZ 1277 12 AH  VA   SCARCE
EGYPT OTTOMAN GOLD 5 PIASTRES SULTAN ABDUL AZIZ 1277 12 AH VA SCARCE
$99.99
TURKEY OTTOMAN  GOLD 100 KURUSH SULTAN ABDUL AZIZ 1277 3  APJA   SCARCE
TURKEY OTTOMAN GOLD 100 KURUSH SULTAN ABDUL AZIZ 1277 3 APJA SCARCE
$399.99
China 1999 1 10 Oz Ounce 10 Yuan Gold Panda Scarce
China 1999 1 10 Oz Ounce 10 Yuan Gold Panda Scarce
$369.00
1915 AUSTRIAN GOLD COIN 20 CORONAS FRANS JOSEPH SCARCE VERY NICE
1915 AUSTRIAN GOLD COIN 20 CORONAS FRANS JOSEPH SCARCE VERY NICE
$300.00
SCARCE 1989 GEM PROOF ISLE of MAN 1 25 Oz PURE GOLD PERSIAN CAT COMMEMORATIVE
SCARCE 1989 GEM PROOF ISLE of MAN 1 25 Oz PURE GOLD PERSIAN CAT COMMEMORATIVE
$119.95
SCARCE PRUSIA 1887 5 MARK GOLD COINUNLISTED DATE PRIVATE MINT
SCARCE PRUSIA 1887 5 MARK GOLD COINUNLISTED DATE PRIVATE MINT
$99.90
GOLD COAST TACKOE 1796 SILVER VF VERY SCARCE
GOLD COAST TACKOE 1796 SILVER VF VERY SCARCE
$599.00
1970 Bhutan 1S Sertum Gold Coin ANACS MS 66 GEM Scarce
1970 Bhutan 1S Sertum Gold Coin ANACS MS 66 GEM Scarce
$595.00
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 1904 10 Korona gold coin from Hungary  High Grade Coin
Scarce 1904 10 Korona gold coin from Hungary High Grade Coin
$195.00
Scarce 1923 87 100 Kur Turkish GOLD Coin  Look PCGS Secure MS 66  7792
Scarce 1923 87 100 Kur Turkish GOLD Coin Look PCGS Secure MS 66 7792
$1,499.99
1944 MEXICO 50 PESOS 12 Oz GOLD COIN PCGS MS65 MS 65 SCARCE DATE
1944 MEXICO 50 PESOS 12 Oz GOLD COIN PCGS MS65 MS 65 SCARCE DATE
$2,795.00
TURKEY OTTOMAN  GOLD ZERI MAHBUB SULTAN MUSTAFA III 1171 AH FR  SCARCE
TURKEY OTTOMAN GOLD ZERI MAHBUB SULTAN MUSTAFA III 1171 AH FR SCARCE
$199.90
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
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List Of Recently Purchased Gold Scarce:


minerva 35 dollars 1973 silver with gold on bust scarce issue, portugal gold coin 5000 reis 1870 d ludovicus i d luis i scarce date, mexico 4 reales 1856 pimc fvf silver km3758 light gold hues scarce type, scarce 1897 russia 5 rouble gold coin imperial russian nicholas ii 5 ruble, 1877 gold 20 francs belgium scarce brilliant uncirculated, scarce 1808a gold 20 francs france napoleon i , china 1984 1 ounce 100 yuan gold panda ngc ms68 scarce, 1773 gold half escudo spainmadrid scarce, 1869bb gold 100 francsfrance very scarce superb condition, 1327 gold 250 kurushturkey very scarce issue only 6878 minted , 1255151853 gold 100 qirshegypt very scarce ngc au53, unc alfonso xii 25 pesetas 1883 stars 1883 gold 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, 1911 russia 10 rouble gold coin ngc unc scarce date, colombia ferdinand vii gold 1818 nrjf escudo ngc fine details scarce km 641, scarce 1897 russia 75 rouble gold coin imperial russian nicholas ii empire, egypt ottoman gold 100 piastres sultan abdul aziz 12777 ah vac scarce, russia 1896 staron rim 50 kscarce ngc xf45 low mintage bluegold tonning , 1894 gold 10 korona hungary scarce date, 1911c gold sovereign canada uncirculated scarce, 1882 gold 10 dinara serbia very scarce gem uncirculated, 1223 gold 2 hayriye altinturkey scarce 46 grams fine gold, scarce 1926 czechoslovakia republic gold dukat look pcgs ms 64 7745, 1777p sf colombia gold escudo scarce popayan mint km 482 ngc vf35, egypt ottoman gold 5 piastres sultan abdul aziz 1277 12 ah va scarce, turkey ottoman gold 100 kurush sultan abdul aziz 12773 apja scarce , china 1999 110 oz ounce 10 yuan gold panda scarce, 1915 austrian gold coin 20 coronas frans joseph scarce very nice, scarce 1989 gem proof isle of man 125 oz pure gold persian cat commemorative, scarce prusia 1887 5 mark gold coinunlisted date private mint , gold coast tackoe 1796 silver vf very scarce, 1970 bhutan 1s sertum gold coin anacs ms66 gem scarce, 14 pahlavi scarce c 2537 or 1978 very rare 900 pure gold persian coin, scarce 1904 10 korona gold coin from hungary high grade coin , scarce 1923 87 100 kur turkish gold coin look pcgs secure ms 66 7792, 1944 mexico 50 pesos 12 oz gold coin pcgs ms65 ms65 scarce date, turkey ottoman gold zeri mahbub sultan mustafa iii 1171 ah fr scarce , 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, 2006 belarus swans 50 rubles proof gold coin scarce, australia 1885 s sovereign shield gold ngc ms 62 scarce victoria young head, czechoslovakia 1926 gold ducat duke wenceslas brilliant unc and scarce km8, czechoslovakia 1927 gold ducat duke wenceslas brilliant unc scarce km8, czechoslovakia 1933 gold ducat duke wenceslas unc details scarce km8, scarce egypt gold coin 1923 ad 1341 ah twenty piastre king fuad i bust right unc, mexico 1919 gold dos peso scarce early date nice detail coin 1, portugal gold coin john v quartinho 1000 1200 reis 1714 very scarce , sh1336 ms65 iran 12 gold pahlavi 1957 unc scarce persia km 1161, pcwpe1574pahlavi dynasty reza shah 19251941 gold one pahlavi scarce date, 1850 gold 20 francs france scarce type second republic, 1912 12 half british sovereign bought from apmex scarce, pahlavi gold coin 19741353 813g super bu mint scarce , morocco 5 franks ah 1347 a1927 ad scarce better date nice light gold tonning , 2017 taniwha 1 oz gold proof coin maori art coin scarce, scarce gold coin 20 pesetas of alfonso xiii spain year 1890 18 90, england william iii 1700 av five guineas pcgs xf40 s3454 very scarce type, 1862t gold 20 lire italy very scarce 645 gr, 1922 gold 100 piastres egypt scarce gem uncirculated, 13321913 gold half toman very scarce uncirculated, 1818 gold 20 lire italy sardinia very scarce ngc xf45, 1930 gold 50 piastresegypt very scarce mint state , 1882 gold 10 dinara serbia very scarce uncirculated, 1835 gold 20 lire italy sardinia scarce early date, 1293 gold 100 kurushturkey scarce 72 gram , 1797 gold guinea great britain very scarce pcgs au50, 1922 gold 100 piastres egypt very scarce gem uncirculated, 1833a gold 40 francsfrance scarce date aunc, 1834a gold 40 francs france scarce date superb coin, 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, portugal 6400 reis gold queen d maria 1796 rio scarce date, 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, india gold fanam scarce , g5862 salzburg austria 14 ducat 1660 gold scarce thun v hohenstein 16541668, mexico gold 18564 mo gf 12 escudo overdate ngc au details scarce km 3785, 1897 russia 5 rouble gold coin scarce date, a blazer swiss 1909 nice burare gem early date scarce pre wwone gold 20 franc, a blazer swiss 1910 bu 20 gold 20 francs early date scarce pre wwone , swiss 1911 nice gem buscarce older date pre wwone gold 20 franc coin, scarce 1965 prince rainier iii de monaco essai 12 franc gold coin km e54 proof, romania 1906 12 12 lei pcgs ms60 km36 scarce one year type gold coin, very scarce gold cob 1 escudo of philip iii year 1617 mint sevilla d, swiss 1914 nice lustrous bua world war one date scarce near melt gold 20 franc, mexico gold 1891 mo m 1 peso ngc ms62 mexico mint746 pieces scarce km 4105, scarce poland polish 1999 laski erasmus 2zl nordic gold coin nice, 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, scarce poland polish 2001 salt mining 2zl nordic gold coin nice grade, scarce 2004 poland polish 2 zloty nordic gold coin wildlife porpoises pcgm, 1902 scarce old russia nicholas ii 10 rubles roubles gold coin free gift, scarce 2001 poland polish 2 zloty nordic gold coin wildlife butterfly pcgm, scarce poland polish 1999 laski erasmus 2zl nordic gold coin nice grade, scarce poland polish 2005 pope john paul ii 2zl nordic gold coin pcgm nice 2, scarce poland polish 2005 pope john paul ii 2zl nordic gold coin pcgm nice 4



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