International Exchange Rates. "The Gold Standard"

Essay by kolohebebegurlCollege, UndergraduateA, April 2008

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In this lecture we will be learning about the golden standard and how it relates to the worlds major currency exchange markets along with the positive and negative aspects of using a gold standard. The golden standard is when a country sets there standard to there rate in gold per ounce or unit. That would give the other countries knowledge of what there rate would be if an exchange was to be made pertaining to currencies. No one countries government can produce more money without the standard amount of gold. As stated by Moffatt, "that the value of money is set by the supply and demand for money and the supply and demand for other goods and services in the economy." (Moffatt, 2007)The United States is currently the reserve asset and print currency that pertains to the value of the gold, so a person can exchange there currency for gold or gold for currency but it will be based on the specific value per unit.

As stated by Bordo, "The gold standard was a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National money and other forms of money (bank deposits and notes) were freely converted into gold at the fixed price." (Bordo, 2002)World's Foreign Exchange Markets.

The world's foreign exchange markets as stated by Miliaresis, "As time goes on, one market tends to keep on getting more and more attention, the Foreign Exchange Markets (Forex). With the power of technical indicators and fundamentals and with the liquidity of it, the currency market topples over any other marketplace." (Miliaresis, 2005) In terms of cash being traded for it's value the foreign exchange market is considered the largest market for the job because there is no time limitation's nor...