Great that you saw it and liked it Wirplit!
when I first saw it I also got the impression that everyone should be aware of what happened. Glad to contribute.

Thanks for that link to the film CarratiM.. its great and I had not seen it before….what happened in Argentina is something everyone should be aware of. Direct parallels with a lot of what is happening now.

Interesting. Thank you.

This is the reason I included the ability for retail investors in the Perth Mint’s gold ETF to redeem their shares for any of our coins or bars or for cash directly with the Mint – a necessary safeguard should the ASX close or our market maker fail to perform.

The problem is that people who build financial products do not think about extreme failure situations and design their products to be robust for such situations.

Thanks a lot for your answer Mike Hall.

So it is indeed as it looks like… it looks like a rat, smells like a rat, acts like a rat… what could it be?? Gold price is indeed fixed under a gold standard. Paradoxical from free marketeers.

It seems indeed artificial to constraint the mean of exchange (money) to the existing amount of a material resource (gold) whose intrinsic value is unclear to me. This would require to artificially and dramatically increase the value of gold, limiting its use as a commodity and limiting the amount of money.

By the way, interesting remark about “a fully liquid store of value guaranteed in perpetuity” being impossible for the majority.

I think Dave is correct. If you don’t have physical gold in your hands, then you only have a fractional paper iou of gold, and that means you may have nothing. Be warned.

@ CArratiaM

Under a gold standard, gold can no longer ‘float.

One of the biggest problems with it is in foreign exchange transactions.

Under Bretton Woods, the countries party to the agreement effectively pegged their currencies together. In reality, all pegged to the US dollar, since it was the dominant economy by some margin. Trade imbalances built up & became impossible to balance because currencies/gold holdings couldn’t adjust without wrecking their own economies. This is why it fell apart. There are parallel problems with the Eurozone system. It is partly why the crisis here is worsening rather than merely stagnating in UK, US etc.

There is no chance whatever that the world will return to a gold standard even if it had any merit for a single country. Global trade & FX would collapse. Unlike such heterodox approaches like MMT, it has been debated massively thru’ the history of economics. It lost the debate years ago. It has no serious body of support, for good reason.

It’s appeal is limited to a narrow group, typically small (ish) investors, who desire a fully liquid store of value guaranteed in perpetuity. There never can be such a guarantee of security for the majority, but the goldbugs clearly believe they deserve it. As we’ve seen, they have little concern for whatever else happens in the world. The nature of the financialised economy is big fish eat little fish in the ‘bust’ phase. The little fish did ok in the ‘boom’ phase, jumping on the extraction bandwagon. Now the bandwagon’s stopped & some got burned too, they’re springing up everywhere complaining.