2007-11-30 00:53:24 · 3 answers · asked by gregorywer 2 in Social Science ➔ Economics
None whatsoever. In fact, J.M. Keynes used to call the idea of money backed by gold a "barbarous relic". On another occasion, he noted that "money is not valuable because it is backed by gold; rather, gold is valuable because it backs money."
Money is only as valuable as goods and services it buys.
2007-11-30 04:53:38 · answer #1 · answered by NC 7 · 0⤊ 0⤋
Before the advent of central banking; gold and silver along with other precious metals had been used to back up a country's currency. This has changed, in that a currency's value is based upon faith in that currencey. With that being said gold is still a scarce commodity that is quite valuable. So if the currency were to fail there is still always gold.
2007-11-30 06:15:53 · answer #2 · answered by stunna3m 3 · 0⤊ 0⤋
As long as a country's currency is backed by something, the value of the currency is greater than that of other countries' currency and inflation is reduced.
2007-11-30 01:01:23 · answer #3 · answered by Anonymous · 0⤊ 1⤋