Why do people go around and say that money used to be backed by gold if banks have never allowed people to exchange...

Why do people go around and say that money used to be backed by gold if banks have never allowed people to exchange their IOUs for a fixed amount of gold?

The currency was backed by gold by the government and you could actually have it exchanged at the government.

Uh, you were able to do that.

No. When 1 kg of gold was stored at the bank the bank issued out and gave you an IOU that said that you could use it to go and claim 1 kg of gold at the bank. But when you came back to the bank they gave you some gold, sure, but never exactly 1 kg.

Money used to be backed by gold about as much as money is backed by stocks today

Wikipedia says you could exchange it for gold in my country, idk what kind of transaction fee your country issued.
Money is not backed by anything today


Nobody claims it to be. It was backed by gold in the past.

A gold backed currency would mean that the bank that issues out the currency when someone stores their gold there also sells the gold back to them for the same amount of money that they got when they stored it there.

There has never been a bank that has done that. A gold backed currency has never existed

Banks dont issue currency, the mint does, and you could litterally go to the mint in my country and exchange your money for gold, or vice versa.

money is whack anyway who gives a shit

If you brought some IOUs and asked for your gold back would you get the same amount of gold that someone could get for that amount of IOUs when the currency was first founded?

If you brought those IOUs a couple of years before the bank claimed to have "floated the currency" would you get the same amount of gold back then too as you would if you did it when the currency was first founded?

You can get the gold back that is of equal value to the currency, you massive autist. The fact that gold value fluctuates or the mint in- or decreases the amount of gold doesnt change that it is gold backed.

Its just like a share in a company. You buy a share but the value of that share can fluctuate and the company can even create more shares sometimes. But the share is till worth a piece of the company.

Exactly. Saying that money used to be backed by gold is exactly like saying that money is backed by stocks today. Just because you can buy some stocks with your money doesn't mean that the value of your money is backed by stocks because the value of stocks changes

No you fucking autistic moron.


I'd say it was backed by milk because you could exchange it at the milk store. Leave my thread

lol end yourself

Thats not what backed by gold means. The mint guaranteed you could always exchange it, regardless of the state of the economy. It WAS gold, just an IOU for in the storehouse.
Your stupid example is just like saying chocolate is backed by raw cotton because you can trade them.

You couldn't exchange the IOU for gold at a pegged exchange rate. Just like you can't exchange the IOU for any other asset at a pegged exchange rate. Money was never backed by gold.

Yes, you literally could.

Looks like they issued out IOUs for gold and silver at the same time. The IOUs you got for silver could be exchanged for gold. It's not very gold-backed-like to let people use anything to buy up all the gold in the treasury that is supposed to be stored for the people with gold certificates. That would mean that there were more IOUs in circulation than there was gold in the treasury

That still is a gold backed currency though.

You haven't proven that the exchange rate of gold and american IOUs were pegged to the same price as when the IOUs were issued out.

The exchange rate of gold for paper notes was pegged, though. What the hell are you even talking about?

Thats not what a gold backed currency is. The exchange rate is pegged at a fixed rate regardless of fluctuations but they can decide to change that fixed rate after a while.

Do you understand what a -backed currency means? It doesn't mean they have the same value throughout their lifespan, or that there's necessarily going to be an exact proportion of notes to backing, it means that the two things are declared to have identical value for a certain amount of commodity per note and can be directly exchanged exactly. That doesn't mean the exchange rate can't be changed, either, it just means that it is for certain that exact rate for that certain time period.

ITT: Leftytards attempt to wrap their minds around value and how currency works.
wew, you guys need to take some basic highschool level economics classes.

Epic retributal, how will we ever recover.





degeneracy fun