Chapter 642 Monetary Hegemony - New Double Standard Law

"Welcome to Austrian Economy Online, my host Bonny.

Today, let's talk about a topic that everyone cares about most - gold.

Everyone knows that gold is wealth, and the Aegis that we use every day is issued on the basis of gold. It can be said that gold and our lives are closely related, and no one can do without it.

In the last month, the price of gold on the Vienna Gold Exchange has risen by 7%, hitting a new high in the past two years.

Now Wired economist Professor Brigitte Foss, for us to interpret the impact of rising gold prices. "

"Drip drip..."

Moderator: "Hello Professor Bridget Foss, can you hear me?"

...

Bridget Foss: "I hear you."

Moderator: "Professor Bridget Foss, everyone is very concerned about the recent rise in the price of gold.

Can you talk about the impact of rising gold prices on the world economy? "

Bridget Foss: "Okay, host."

"We all know that gold is a precious metal, usually directly used as currency or as a standard, and its price has always been stable, even if it fluctuates very little.

Gold prices have risen by 7% in the last month, which can be said to be both unexpected and expected.

You may say that what I said is contradictory, not logical at all, and actually not contradictory at all.

Unexpectedly, that is because gold exists as a currency and standard, and its own value is unchanged. Under normal circumstances, even if there are fluctuations, it is impossible to rise so much.

However, in addition to being a currency, gold is also a commodity in itself. Since it is a commodity, the price is determined by the market, and it is normal for it to rise in the short term. "

"Aside from the halo of being a currency, we will analyze the reasons for the price rise of gold as a commodity separately, and everyone will be clear.

The rise in gold prices is not an isolated case in the Vienna Gold Exchange. Almost at the same time, in the London gold exchange market, the price of gold also rose year-on-year.

The direct reason for the rise in gold prices is that two months ago, more than a dozen gold mining giants, including South African Mining Group and British Dawes Gold Mine Group, simultaneously announced equipment maintenance and reduced gold production capacity.

This decision directly led to a reduction of 20 tons of gold in circulation in the global gold market last month, and the market price will naturally rise.

Equipment maintenance is temporary, and the gold mining giants also want to make money, and production capacity will resume soon.

However, whether the price of gold can return to normal levels immediately, this may not be the case. With the development of the times, the gold standard has become the mainstream of the times.

In recent years, the world economy has developed rapidly, and the demand for currency is also increasing day by day.

The demand for gold as the standard gold is also increasing day by day. Gold mining, however, has not grown in tandem.

In order to meet the currency demand in the market, countries continue to increase their leverage, and the nominal exchange ratio with gold has not changed, but the risk of additional currency issuance in essence has emerged.

This time the exchange price of gold and the currencies of many countries has risen because of this factor. The standard is the inflation caused by the large number of currencies issued by various countries.

We don't have to worry about this, the exchange value of Aegis and gold is still stable.

Here I suggest that if it is not urgently needed, it is best not to hold a large amount of foreign exchange.

Because no one knows, maybe when the money in your hands will become waste paper.

Judging from the current situation, the currencies of many countries in Europe have experienced substantial depreciation. If these countries, the government does not stop the behavior of abusive currency, sooner or later will lead to disaster. "

Moderator: "Professor Brigitte Foss, you just mentioned that some countries have insufficient gold reserves, leading to inflation.

So how should these countries deal with this situation? "

Brigitte Foss: "The easiest way to do this is to use the new duplication method.

Don't get me wrong, the new multi-standard method I propose is not the traditional gold and silver multi-standard system, but a more advanced secondary standard method.

For most countries, gold is not enough for a while. Everyone wants to maintain the gold standard system, so what should we do?

After research, I found that the new duplication method can perfectly solve this problem.

To put it simply, it is to replace gold with a credible and reliable international currency and act as the standard gold issuance currency.

This is equivalent to using one piece of gold as the standard gold twice, issuing two pieces of currency, and guaranteeing normal redemption. This quadratic standard method, I call it: the new double standard method. "

...

I don't know when it started, Franz also got into the habit of listening to the radio, even though he knew it was bragging.

The so-called rise in gold prices is actually a fight against other countries' currencies by artificially manipulating the price of gold by the two gold producing countries, Britain and Austria.

The so-called gold production capacity, isn't this the final decision of the gold mining country?

In order to increase the competitiveness of their own currencies, Britain and Austria have been controlling gold exports and artificially creating trouble for their competitors.

This is for gold standard countries, not enough gold reserves, it will be fatal.

The demand for currency in the market will not decrease because of insufficient gold reserves, so everyone has to increase the leverage of currency issuance.

This is what the UK and Austria want to see, bar

The higher the rod, the greater the risk. It cannot be seen in a period of good economic development. Once it encounters a change, it will collapse, and there is no ability to resist risks at all.

Britain and Austria are fighting fiercely for currency hegemony, and it does not prevent the two countries from joining forces to jointly control the gold pricing power and attack other competitors first.

It can be said that from the very beginning, the gold standard was a huge pit set up by the British for all countries in the world. This giant pit is still a conspiracy. Even if they know that there is a risk, everyone has to jump into it.

Regardless, gold is relatively stable. Even if it is artificially manipulated, it is impossible to play too much! If it goes too far, it will also affect the interests of Britain and Austria.

It's not that no country wants to get out of this crater, it's just that they all failed in the end. Facts have proved that countries that play on the silver standard end up being miserable.

In the middle and late 19th century, silver has been in a state of depreciation, and this fluctuation is much larger than that of gold.

Britain and Austria are both gold-standard countries, and they will also stabilize the price of gold for their own interests. The so-called market fluctuations are just obstacles set up against the currencies of other countries.

This magnitude is usually only a few points and does not last. Usually within a few months, the market will return to normal.

Simply put, as long as the governments of various countries eat gold, the price of gold will rise immediately. When everyone stops eating gold, many markets will return to normal.

This rise is still targeted. If you use the British pound or Aegis to acquire it, there is no such problem.

If you want to import gold tariffs, it is still indispensable. If you directly hold Aegis and GBP as the standard gold, you can also achieve the goal, and there are still tariffs on gold purchases.

Essentially, this is a means of promoting monetary hegemony, albeit in a more subtle way.

...

After listening to a broadcast, Franz hung up the phone: "Frederick, go and ask how far the radio research and development has progressed. This kind of interesting news should be shared with the world."

Before the advent of radio, wireless broadcasting was naturally out of the question. Franz now listens to cable radio, a technology that was born with the birth of the telephone.

Simply put, it is to connect many telephone lines in series to receive the same information source.

This kind of high-level technology is naturally not something that ordinary people can enjoy. If you want to listen to the radio, you need at least a phone and pay high radio fees.

At present, there are less than 20 cities in the world with broadcast, and even less than 50,000 broadcast users.

Austria was at the forefront of the Industrial Revolution, and broadcasting started relatively early. Vienna now has more than 5,000 paying subscribers and is the city with the highest broadcast coverage in the world.

This number is approaching its limit. Want to increase broadcast coverage, unless wireless broadcasting is born.

The audience is limited, so radio programs cannot be colorful. In addition to news, there are only comments on popular current affairs, and occasionally a few songs and a few jokes, even if it is an entertainment program.

The only advantage is probably that there are no advertisements. It's not that broadcasters don't want to charge advertising fees. The main reason is that there are too few users and they can't receive a few dollars.

Moreover, the customers we serve now are all high-end users, so there is no owner of money. What everyone wants is high-end service.

Frederick shrugged and replied: "No need for father, I just went to see it yesterday. The progress is very slow at present, the transmission distance is still at 1,200 yards (about 1097 meters), and there can be no obstacles in the middle. ."

No way, who made Franz have a bad memory? The principle of radio has long been forgotten, and now it can only be freely developed by scientists.

"One thousand and two hundred yards" was far from Franz's expectations. Don't talk about wireless telegraphy, it's a bit boring to use as a walkie-talkie.

Franz sighed: "Forget it, let them experiment slowly! Scientific research is all about luck, and it's useless to rush."

This was said to Frederick, as well as to himself.