Rate of gold
The gold standard - the monetary system in which the role of universal equivalent is gold, and in the circulation are gold coins, credit and paper money, small change in the metal-to-solid ratio.
The beginning of the era referred to as the gold standard of the eighteenth century, some researchers - to the 1816-1821 years, when the UK was restored after the Napoleonic wars, exchange banknotes for gold. Legally, gold was considered the only form of world money at a conference in Paris in 1867, although the silver in many countries has not yet been supplanted by gold.
Gold standard system includes several basic elements. Not all of them and no manifest in all countries, but the trend is discernible in their distribution.
In the circulation in the gold-coins. They were the main form of money, all the rest - the credit-paper money and money from other metals - have played a subordinate role. According to some reports, in 1913, the three main countries of the capitalist world the United States, Britain and France accounted for 62% of the global monetary circulation, which in magnitude was 3.5 tons of gold coins had a lot in Germany. In Russia, gold coins paid relatively little - 0.4 tonnes, or 7% of the world.
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All other forms of money were exchanged for gold at par. Dimension provided by private commercial banks, always holding the stock of gold coins. At the highest level dimension provides a central-banks of which preserved the national gold reserves. The U.S., Britain and France in 1913 accounted for 51% of the world's central reserves. The share of stocks, it seems, is somewhat lower than their proportion in circulation coins. Reason for this is that Britain, which was the center of the international monetary system, traditionally a very modest cost the gold reserve. The largest U.S. gold reserves had, in second place was Russia in the third. France, which had respectively 1.9, 1.2, 1.0 tons
Centralized stocks were mostly reserve world currency, international means of payment. In 1913 the gold reserves of all countries assessed b $ 5.8 billion, while foreign exchange reserves - only $ 0.8 billion dollar here used as the unit of account, the real exchange reserves in dollars by central banks was virtually no all reserves were denominated in pounds sterling and were kept in London banks. Other currencies are not carried back function.
The gold content of each monetary unit has been established by law and supported, as a rule, unchanged for decades. This ensured the stability of the relationship between enezhnymi units. The gold content was 7.323 pound grams of pure gold and the dollar - 1.505 g. Thus, parity of the pound in dollars, as a private branch of the first magnitude in the second - 4.87. The same ratio of solid pound and the dollar associated with the French franc, German mark and other major currencies.
There was a free mutual convertibility, ie, freedom to exchange one currency for another at market rates, which do not deviate from parity by more than 1%. The course could not deviate more, because a debtor, who was obliged to pay the debt in foreign currency, has always had a choice to either buy into their national money that currency or gold to buy and send. For example, during the 1889-1908 period the pound sterling in Paris, do not deviate from parity by more than 0.67%. Dollar in Paris deviated from parity more - up to 1.18%. The difference is explained by the fact that transfer of gold between Paris and New York cost more than that between Paris and London.
Import and export of gold was free. Gold is constantly moving between countries. This does not necessarily mean that the foreign trade transaction was completed, each payment in gold. The overwhelming mass of non-cash payments made way - through the translation, currency between banks. Gold comes into play only in extreme cases, as a last resort to repay the balance of all mutual claims and liabilities between the two countries. For example, an international payment transactions for 1894 is estimated at 20 billion dollars, and the movement of gold between countries has left $ 0.7 billion
Normal functioning of the system depended on the gold reserves of central banks. To ensure continuity of the dimension of bills, laws were passed, which obliged the central banks do not always have the gold less than a certain percentage of their banknotes issued. To hold gold and not resort since the dimension of bills out at the big reclamation of metal, banks have two main tools. First, it was possible to obtain a loan in foreign currency abroad and, if necessary, exchange it for gold. Second, banks can resort to a restrictive credit policy: they raised the interest rate on their loans to private commercial banks to reduce the resulting amount of credit and banknotes.
With the increased interest rate commercial banks charge lower loan from the central bank and give themselves less loans to industrialists, traders, people. Money becomes more expensive, they naturally become less in circulation. This could result in the reduction of gold reclaim their central bank. In addition, high interest rates attract. foreign capital, and it improves the balance of payments and reduces the need for gold to pay off foreign debts for payments abroad.
During the First World War, almost all countries have abolished the gold standard and tried to concentrate in their hands available in the country of gold. Inconvertible into gold provided the pound in relation to gold, commodities and hard foreign currencies. Financial magnates with conservative politicians could not come to terms with it. Pound Gold was the symbol of the British Empire. And found the right person for the operation of the pre-war reconstruction - Finance Minister, Winston Churchill, later Prime Minister of Great Britain. Faced a very painful operation. We had to reduce prices in the country, the appreciation of the pound sterling, improving the balance of payments and flow of gold. This was achieved at the cost of mass unemployment and wage cuts.
The gold standard was restored pre-war parity on the basis of the pound, that is, reintroduce the old ratio pound and the dollar. Meanwhile, at this ratio level of prices in the UK was significantly higher than in the U.S.. The pound was overvalued.
However, the post-war gold standard was a pale shadow of its pre-war. Circulation of gold coins survived in only a very small extent in the United States. Britain and France restored monetary system in the form of gold bullion standard: the central banks exchange notes only on standard weight bars. Gradually the yellow metal is taken out of domestic circulation and concentrated in the hands of the state as a world money. But this system did not last long: the capitalist world was on the verge of a deep crisis.
A departure from gold in the State is in many ways. Golden Pound fell in September 1931 under the impact between the national financial crisis - other countries denied him in trust. In the U.S. withdrawal the reversibility dollar into gold and gold mobilization of the state were the first anti-crisis measures of President FD Roosevelt, who assumed the duties of president in 1933 in an atmosphere of acute crisis.
France stayed longer than others. In Germany the gold and foreign currency subordinated to prepare for war. Were imposed severe restrictions on any payments abroad, frozen foreign bank accounts. The question of the gold standard was removed. In Japan, the gold standard was abolished in 1931.
An important result of all these changes was that the solid relationship between the currencies, parities, have ceased to exist. As soon as the country moved away from the gold standard, the rate of its currency sharply fell.
International monetary system that emerged after World War II, called Bretton Woods. Its outlines were developed in the small resort town in New Hampshire in the U.S., where gathered the International Finance Conference. It was attended by delegates from 44 countries, including. USSR, USA, UK and other members of the anti-Hitler coalition.
The Conference discussed the creation of the world monetary financial institution and the international regulation of currency relations through this organization. The Conference adopted the statute of the International Monetary Fund. USSR has not ratified the Bretton Woods agreement.
The main objective of the new monetary order was to maintain the benefits of gold, standard, and getting rid of its shortcomings. The benefits include stability of relations between the currencies, and their mutual convertibility, free movement of goods and capital. The importance attached to the discipline of the gold standard: if the country was "not afford", she lost the gold, and was forced to adopt austerity measures.
Gold recovered as a gauge of the international value of currency units - each country has pledged to secure the gold content of its currency and to maintain it. Gold also announced the main form of international reserves and the ultimate means of payment deficit balance.
These measures are absolutely not affect domestic monetary functions of gold. It was obvious that the exchange of bank notes in gold will not be restored. However, according to tradition, most countries adhered to the law under which bank notes and other forms of credit money were to some extent, covered with gold. The United States abolished this rule only in the 50's.
Thus, introduced a kind of international gold standard, which in fact was rather zolotodollarovym standard. Currencies are attached to the dollar, which was regarded as a duplicate of the precious metal. Real economic value has been the gold content of the dollar, or the official price of gold in dollars, because of this: it costs to buy and sell central banks. From 1934 to 1971 the price was unchanged at $ 35 per ounce.
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The dimension of the dollar to gold at a fixed rate distinguished him against other currencies. Neither Britain nor any other country could not go for it. Moreover, the United Kingdom, could not enter the reversibility of its currency into dollars, which further emphasized the special situation of the U.S. currency.
Dollar as good as gold, the Americans say. In late 1949, U.S. gold reserves reached a record near-22 tons - and was 70% of reserves in the capitalist world. After that, the contraction of the gold was suspended, and the late 50s began to increase the reverse process. In 1960 the U.S. had 15.8 thousand tons, and in 1971, when they have ceased to exchange dollars for gold, - 8,6 thousand tons of this level, Pa U.S. gold reserve stood as the reserves of other nations. Interstate movement of gold has stopped, or rather - in this movement diminished the elements characteristic of the world's money, and increased freight lines.
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In the world of finance is clearly seen paradox: if your debt is $ 5 and there is nothing to back you in the hands of his creditor. If you owe $ 5 billion, the lender is in your hands. This truth has manifested itself, when Britain owes many countries, the British Empire during the war and used the debt to put pressure on creditor countries. In 50-60s in the same situation were the United States. Debt to other countries grew like a snowball - the state accumulating dollars as a result of increased exports of their products in the U.S..
In 1950, gold reserves of the United States almost seven times higher than the dollar assets of foreign states. In 1967, he was already 78% of assets in which the owners could demand gold. In 1971 this figure fell to 22%. It was a critical level at which the United States have abolished exchange dollars for foreign governments and banks.
A special role in the crash zolotodollarovogo standard played in France. Spending, upgrading in enterprises, the French launched an offensive monopoly on foreign markets. Balance of payments has improved markedly, France began to accumulate foreign exchange reserves. Gradually formed a clear position: it is necessary to force Americans to pay their bills in gold. So the French government did. Until 1965 France was withdrawing gold from the U.S. without raising the noise. A February 4, President de Gaulle officially criticized the entire monetary system the West, yes, his statement was backed up by further withdrawal of the French gold from the United States. French example was followed by several others.
United States began to exert pressure on the state, ensuring that they would refrain from sharing their accumulated dollars for gold. Such were regarded as unfriendly to Washington. Part of this work, but in 1971 a new wave of confidence in the dollar and some floorboards began to confiscate gold. In August 1971 exchange dollars for gold has been discontinued and zolotodollarovy standard ceased to exist.
The collapse of the gold standard did not mean the elimination of the functions of gold in the international monetary system or the weakening of its economic role as a whole.