Gold Standard Economy : Stagnation in Disguise
Wow. Such fancy title. Even I first thought, “Oh bollocks…”
For starter, i think it’s better before give this eco-blab a shot to dig stuff about gold standard system (the real thing, not what i wrote earlier) first. Just to grab the feeling, you know. So that you can point out my mistakes, ‘cuz I’m definitely going to make some.
Well, it’s not for no reason Nixon decided to write off The Bretton Woods System back in 1971. I’m not going to reminisce of the glory (or rather, gloomy) days here, just to review things a bit. No matter what, the system once failed, and this is the fact that everyone has to coincide.
The thing is, in Gold Standard Economy, Bank can’t release bonds as freely, or permit loans as generously. Central Bank also can’t just print bucks (or in Indonesia, repes) whenever they feel like, because all money must be backed by the same amount of gold. Why can’t they give loans as easy as they normally would? Because all loans must be given only to real sector …….
*to be continued (too lazy to write)