Why the value of money is determined by the gold?

Why the value of money is determined by the gold? In the category gold discovery more articles and learn more information about Why the value of money is determined by the gold? Reviews Price Specifications Features Image manuals videos Accessories All this in metal detectors for gold.

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Why the value of money is determined by the gold? – Painted metal coins or paper , which we believe money is really just symbols . But they represent something real . Money confirmed deposits of precious metal present in the state, which produces money. Standard for measuring the value of money , common in the civilized world , are gold and silver. They are quite rare and retain their value , but their reserves are sufficient to meet the needs of the market.

In other words , paper money and coins issued by the government as money , were accepted as having value because it backed up the amount of gold and silver, available in the treasury .

In 1821, Britain passed monometallism ( ie using a single metal ) as the basis of its monetary system. Gold was adopted as the official currency . By 1914, gold has become the unit of measurement of almost all currencies in the world . Having a standard measure of value, the country could easily trade with each other . United States dollars , the Franks of France , the German mark had set value in gold.

In 1933, most countries abandoned the gold standard. But many currencies, including U.S. currency , is still defined a set price of gold. Gold is very important in international trade. Government buys and sells gold bullion . Part of the gold used to pay international debts , the other part is stored . Stored gold is called gold reserves .