[OPE-L:2454] RE: commodity money

Michael Williams (100417.2625@compuserve.com)
Mon, 3 Jun 1996 17:13:56 -0700

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In a response to Duncan, Chai-on writes:

If there is a link "between the value of the national currency and gold (or
some other produced commodity)", there should be no need to a fixed
exchange rate. Because the links are removed, the offical exchange
rate system was introduced.

Michael W.:

The distinction between a gold-standard system, and official exchange rate
system and a floating exchange rate is a matter of degree and vary forms of
interaction between negotiated state interventions and world market forces.
Under the Gold standard, States negotiated parity rates; under official exchange
rates, market forces, including speculation had varying degrees of impact; and
all floating regimes have been partial and 'dirty'. Under no modern system, as
far as I can see, has some abstract labour embodied value of gold played any
role whatsoever.


Michael W.