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 majority of the men of the North, and of the South and East and West, are not men of principle. If they vote, they do not send men to Congress on errands of humanity; but while their brothers and sisters are being scourged and hung for loving liberty,... it is the mismanagement of wood and iron and stone and gold which concerns them.”
—Henry David Thoreau (1817–1862)
“Gentlemen, those confederate flags and our national standard are what has made this union great. In what other country could a man who fought against you be permitted to serve as judge over you, be permitted to run for reelection and bespeak your suffrage on Tuesday next at the poles.”
—Laurence Stallings (1894–1968)