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<p>[QUOTE=&quot;Ginger1, post: 1993486, member: 72388&quot;]The foundation of the gold standard is that a currency&#039;s value is supported by some weight in gold. Inherently, it makes sense to value currency by some tangible and precious resource, otherwise, currency is just paper bills. Therefore, by tying paper money to an amount of gold, it gives the holder of the paper money the right to exchange her paper bills for actual gold. Ideally, this requires that paper money be readily exchangeable for gold. If a bank does not have gold, then the paper money has no value. But theoretically, actual gold would flow between nations to ensure that all currencies would be supported by gold.[/QUOTE]</p><p><br /></p>

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