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<p>[QUOTE=&quot;C Jay, post: 1366035, member: 13184&quot;]Let&#039;s say we back every dollar with a nano of gold to the tune of $40,000.00 per ounce and allow the free exchange of gold and dollars. This does not mean that the rest of the world will follow suit. What prevents me from taking my 1311 euros, buying an ounce of gold, trading it for dollars, exchanging the 40,000 dollars for 30,400 euros, providing I&#039;m first in line, before the USD winds up in the decimal points and 40,000 dollars will only get me 1300 euros. This is the same problem, only not as bad, as the British had when at the end of WWI when they tried to go back on the gold standard. People took advantage of a favorable exchange rate and sovereigns fled to France. The only way I see it working is to have a fractional reserve and using gold as an anchor for the dollar.[/QUOTE]</p><p><br /></p>

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