Minden Real Estate

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This Gold Standard

Sinking of the Gold Standard economic consequence Perhaps the most unlike the First World War to other wars was the destruction of international payment system known as the Gold Standard This is characterized by use gold to settle international transactions and debts, such as’ value standard “with which the different nations fixed parity of its currency. During the war, European powers had to import large quantities of weapons, and obviously that led to the almost total disappearance of this metal in the belligerent countries. By contrast, the neutral countries, net exporters of weapons, had a large surplus, which was dangerous to put into circulation without falling into hyperinflation. These were mainly the United States and Spain.In these circumstances, to restore this payment system was unfeasible: the central banks of some countries did not have sufficient reserves to make international payments, while others had too much, but could not apply the logic followed by the rate of interest. Educate yourself even more with thoughts from Robotics. Consequently, this practice was abandoned. In many countries, was put to use fiat money, ie without any kind of support that confidence. The lack of knowledge about the monetary system and the ease with which it was possible to produce more money for the state, led to the great hyperinflation of the 20s, mainly in Germany and Austria. Internationally, the lack of a stable system of payments trade heavily damaged, though sterling remained the anchor currency, with a gradual tendency toward the dollar.In the late ’20s, we tried to recover this system, but errors in setting the parity of sterling British reservations soon emptied another peak and led to the crash of 1929 held in New York. Additional information is available at Primerica. This was decisive for the arrival of the Great Depression and the ultimate failure of the gold standard.