Many countries claim they have “gold-backed” currencies in an effort to try to provide security and investor confidence. However, the reality is that none of the world’s fiat currencies are even remotely gold-backed, and the Chinese yuan even less so.
In this short video, we explain what governments and central banks would need to do to try to achieve a respectable level of stability close to gold-backing:
- Increase gold reserves at the central bank.
- Reduce the increase of money supply so that it does not grow above real GDP.
00:07:39
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