The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. There are distinct kinds of "gold standards". First, the gold specie standard is a system in which the monetary unit is associated with circulating gold coins, or with the unit of value defined in terms of one particular circulating gold coin in conjunction with subsidiary coinage made from a less valuable metal.
Similarly, the gold exchange standard typically does not involve the circulation of gold coins. Rather, it uses notes or coins made of silver or other metals, but where the authorities guarantee a fixed exchange rate with another country that is on the gold standard. This creates a de facto gold standard, in that the value of the silver coins has a fixed external value in terms of gold that is independent of the inherent silver value. Finally, the gold bullion standard is a system in which gold coins do not circulate, but in which the authorities have agreed to sell gold bullion on demand at a fixed price in exchange for circulating currency.
No country currently uses the gold standard as the basis of its monetary system, although several hold substantial gold reserves.
Read more about Gold Standard: Theory, Advocates of A Renewed Gold Standard, Gold As A Reserve Today
Famous quotes containing the words gold and/or standard:
“The award of a pure gold medal for poetry would flatter the recipient unduly: no poem ever attains such carat purity.”
—Robert Graves (1895–1985)
“Any honest examination of the national life proves how far we are from the standard of human freedom with which we began. The recovery of this standard demands of everyone who loves this country a hard look at himself, for the greatest achievments must begin somewhere, and they always begin with the person. If we are not capable of this examination, we may yet become one of the most distinguished and monumental failures in the history of nations.”
—James Baldwin (1924–1987)