I especially like the idea that it can be run without a central bank. Without intervention, there is less likelihood for shocks and uncertainties that are tied to it. I feel that this is important because it takes away a lot of speculative expectations when the economy is left on its own and able to self-correct. However, it is also important to note that it would require a lot of effort to change the system again. The gold standard should be left as a benchmark for what is expected of a central bank.
We can understand this if we first look at the uses of gold. For the most part it is used as a way of investment, as it is considered as one commodity which has a very stable value over the long-run. Secondly, it is used as a reserve by countries. At the same time, United States Dollar is also used as a reserve as an alternative to keeping gold. During the recession, the US Dollar lost much of its stability, which in turn made the investors look for gold as the safer option to invest.
This openness also means that the exchange rate has a strong relationship to price stability. Also, this type of economy has a very limited capacity to close the capital and financial accounts as a way of reducing its external vulnerability. Further, the ability to boost domestic output by making imports more expensive through depreciation is not readily available to small economies due to the high dependency on imports. In addition, depreciation leaves export prices unchanged in foreign currency terms and therefore does not provide an immediate incentive for an increase in
The reason why Gold acts as a hedge against dollar is because Gold cannot and is not produced by authorities who produce currencies. This implies that people who can increase or decrease the supply of a currency from time to time to debase its value cannot carry out similar actions to debase the value of Gold. However it is also important to note that the extent to which gold served as a hedging instrument has differed from time to time for various reasons such as the private sectors attitudes towards gold might have been affected by the problems in gold producing countries and they opted against using it as a hedging instrument, also there might have been a firm expectation that the exchange rate fluctuation was temporary and thus people opted against rearranging their portfolios. Gold has served as a hedge against fluctuation in the foreign exchange value of the dollar, but it has not done so to a degree that seems highly dependent on somewhat unpredictable political attitudes and events (Forrest Capie and Terence C.Mills
It actually doesn't matter if it is your child, your parents, your spouse. Unless of course, you're a millionaire who doesn't really mind other people having a shopping spree with your credit card. NO CASH ADVANCES Cash advances is a big no when it comes to credit cards. This is because cash advance would unfortunately lead to higher interest rate, not just on your advance account, but also on your transaction fees. Also, it doesn't have a grace period, and that would mean, that from the moment you have gotten your cash advance, the interest would then begin.
According to the Xavier Gabaix investing in Gold mining companies is as unsafe and unpredictable as investing in any other stocks. Instead garbaix advice conservative or long term investor to invest in cash- like instruments such as money market funds, short term bonds even though they have low interest. The reason why we agree with these advice is due to the properties that bond have such contract between the corporation and the investor, the fixed return at every agreed time, also the fact money market fund are easily liquidable given their life time. That being said an investor should also consider the fact that investing in bonds does not guarantee safety if there is a high rate of
Precious metals like gold, silver and platinum are commodities outside the control of central banks and are another form of currency. It is effortlessly exchangeable into any currencies, portable and easily altered in appearance. Precious metals are virtually untraceable, can be kept without keeping a record and can maintain a stable price. The real value of the goods can easily be avoided to be declared, hence, minimizing the tax exposure. Therefore, this business type is vulnerable for ML/ TF, Tax Evasion, Corruption and Smuggling, among others; thus increasing the risks faced by firm.
Cryptocurrencies have numerous advantages, although this is true, being in an early stage exposes this technology to weaknesses. Being decentralized keeps the money safe from misuse by governments, safeguarding against inflation and other problems. In third world countries where the government makes poor financial decisions, the negative impacts on the currency also affect each citizen. Cryptocurrencies allow individuals without access to stable banking institution, connection to a more solid system. Another advantage is, the capability to exchange money globally for a lower cost.
Due to commemorate occasions and fight against weak ringgit, purchase of gold is cannot be escaped for consumer. Therefore, Poh Kong tried to provide more promotions as well as selling more entry level products that are affordable by consumers in order to recover the loss of implemented GST. Economic • Foreign Exchange Rate Recently, foreign exchange rate of Malaysia ringgit has dropped which mean depreciation in ringgit. This situation might help Poh Kong to attract some consumer purchase gold as a hedge against the depreciation ringgit but this cannot 100% to ensure that depreciation of ringgit will brought up company’s sale. However, based on past few year, demands of precious metals and gold were slightly increased due to depreciation of ringgit.