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• Bastian Brandt
• Amsterdam (Nl)
• Netherlands

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Gold Standard

Say there are a hundred gold coins and a hundred people using them as a measurement to exchange their goods and services.

If you as one of them would be the only provider of goods and services for all, you would end up with all the scarce and valuable gold coins yourself and if the others wanted to have some of your scarce and valuable gold coins they would have to sell you their goods and services.

That is a fair system.

But if now there would come another person into your economy, the 101th person and that person would 'create fake gold coins' himself to purchase goods and services from your economy, he would steal from all of you without creating any goods or services himself.

Is this exactly what commercial banks do 'legaly' when they are creating new money everytime they give out a new loan? Counterfeiting, 'bringing fake gold coins into circulation'?

That is what these videos explain:

-> http://www.youtube.com/watch?v=lsmbWBpnCNk&feature=related

-> http://www.youtube.com/watch?v=XcGh1Dex4Yo