when the USA currency was on the gold standard how did the government create more currency for circulation. How could they buy more gold? For gold?
In: Economics
The total money supply was controlled, so money would come out of circulation and be destroyed. The actual amount of gold reserves is tightly held secret so no one would ever know if value is 1:1 or .9:1. Theoretically, as the speculative value of gold increases you could also release more currency. Finally, there’s a deflationary effect of overprinting.
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