The gold standard
The most important thing about money is its value. If stones were money, then all of us would have been millionaires. We would have just picked up a stone to buy bread. The question is: will anybody be willing to give us bread for a stone? Of course not! No economy can be build up based on that concept.
Many different items where used in the past for money. People started trading using the barter system; soon enough they discovered that they can use gold which is rare to find and hard to be mined thus have a good value. Later on, Gold was transferred into coins. But coins were heavy, and people couldn’t carry out huge amounts with them.
Governments decided that printed money was the solution. Printed money, called bills or notes, was lighter and easier to carry. A one thousand dollar bill is a lot lighter than a 1 dollar coin. This was a good solution to the big difficulty; but it still had some problems. With printed money we started facing the issue of how to prevent printing money? The easier solution that governments found was to use secret methods of printing. But can we be certain that governments won’t print money? It’s a fact that a lot of governments have done that in the past. For example, Germany did it after the World War I, and as a result, its currency lost its value and became worthless. Germans were literally burning money to keep warm in the winter. People in such economies turn toward “hard currencies”. Obviously, there was a need to prevent governments from simply printing money; and to do that, they needed to make that money equal to something else that would be very hard to be print, do or find; GOLD!
There were too many advantages for using money backed by gold:
-Every country had gold, which is a natural material, and most people were familiar with it, thus it was a common measure of value.
-Economies were stabilized by keeping the money supply based on the gold standard. More money causes prices to go up since we will have more demand before the economy has time to expand its available goods and services. The amount of gold is very limited, so by linking money to gold, we limit the amount of printed currency.
I think Gold will be remain same important as it is today and in future.
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If stones were money, then all of us would have been millionaires. We would have just picked up a stone to buy bread.
I have to agree with you. How can we forget the situation in Zimbabwe. An egg or a bread cost Millions and billions of Zim dollars. Even the poorest people there were millionaires. So if stones were money, then all of us would have been millionaires.But these millions cant buy anything good for us.
I've seen on some forums that Gold seems to be always up that's why it's easier to trade but expensive! I never tried Gold even on demo yet, so do you guys think it's true?
I am a hosted slave beta.
Gold is the most preferred commodity and it is always traded more and in demand all around the world. It requires much better analysis and more trading capital to trade in gold and should be traded for long term to make more profits .
Gold is my favorite pair because the profit is just too high in it but we need a good amount of capital for it to make a good amount of profit but its really unpredictable and its hard to make profit on it.
Gold is one of the most profitable pair and we can make profit through it and even i am just working hard on this pair to study the market and this pair need a good funds and we can make large profit but we need to be more attentive on it.