by David Chen

Upon the end of World War II, foreign exchange reserves used to be tied to Gold Standard in Bretton Woods system.  After 1970’s, US dollar has become the de facto foreign exchange reserve currency for most of the world(and to a much smaller extend, earlier British pound sterling, later the Euro).  We will only discuss pros and cons of those international trade currency based on fiat money here:

Pros

• easy to handle trade deficit and surplus between nations
• provide good tools for international trade policies and easy to stimulate economic development activities across borders
• bear good values when US government enacted responsible economic policies

Cons

• lead to unfair loan practice to countries who can issue the exchange reserve currencies
• cause collective nervous breakdown when US government or general population acts irresponsibly

 

Does Transparent Gold possess the best of both worlds?

Answer: Yes.