RandomPoster
Platinum Member
- May 22, 2017
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Can a country use silver, gold, and platinum as their currency? You would have 1 gram, 10 gram, 100 gram etc. coins of each metal. That TV costs 12 grams of gold or 600 dollars. All foreign trade would be our dollars for either your currency or rare metals. Eventually our citizens are conducting everyday domestic commerce in silver, gold, platinum, pesos, rubles, euros, various other foreign currencies, and occasionally dollars mixed in there. You pay your bill at the bar with 3 ounces of gold, 100 pesos, and 20 euros and the guy gives you 6 dollars, 100 rubles and a gram of silver in change. It would be a very flexible economy.
We would be resistant to the effects of hyper-inflation if we ever de-value our currency, as the international price of gold would not be effected by our fiscal policy, so the domestic economy could plow on in rare metals in times of inflation while we ignore our own currency and pretend it doesn't exist for a while, except for foreign commerce. Let's say we've reduced the value of the dollar to 2,500 dollars for an ounce of gold. Our citizens stop using dollars for domestic commerce until we can believably re-value our currency.
This would allow us to have more flexibility in economic policies as the domestic economy could be rendered temporarily immune to the effects of inflation, as the international price of rare metals would not be effected by what we have done to our currency.
We would be resistant to the effects of hyper-inflation if we ever de-value our currency, as the international price of gold would not be effected by our fiscal policy, so the domestic economy could plow on in rare metals in times of inflation while we ignore our own currency and pretend it doesn't exist for a while, except for foreign commerce. Let's say we've reduced the value of the dollar to 2,500 dollars for an ounce of gold. Our citizens stop using dollars for domestic commerce until we can believably re-value our currency.
This would allow us to have more flexibility in economic policies as the domestic economy could be rendered temporarily immune to the effects of inflation, as the international price of rare metals would not be effected by what we have done to our currency.