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Monetary value, its regulations, and gold

 The monetary value has great importance in the global economy and it also has purchasing power that expresses the type of money and it has a tracking system and a path. The monetary value is the largest part of the world of money, and the relationship of gold to the monetary value is a deep and strong relationship, and we will know it and know what the strength of the economy is in the existence of the relationship of gold to the monetary value.

  

Monetary value and its systems

The monetary and development institutions consist of: the Central Bank, the Ministry of Finance, commercial and specialized banks.
The leadership of those institutions is the Central Bank.
Who handles the process of issuing paper money.
The commercial banks undertake the process of creating deposit money.
We mean the terminal money: it is the money that has legal discretionary power and has absolute acceptance to pay its full face value.
Used to pay off obligations between individuals.
The monetary value of the monetary unit (the face value or written value on it) under commodity monetary systems: is exactly equal
The value of what a monetary unit contains of a commodity.
As the paper monetary systems include: legal banknotes, writing money, and writing money.
That trading or offering in the light of paper monetary systems depends on: obligation and sovereignty.
The monetary base is defined as the monetary unit that performs the tasks of measuring values ​​and standardizing prices.
We mean legal money: the money that has the power of legal discharge and the unlimited salutary value among the units
Other cash in circulation.
We find among the most important functions of the monetary base:
It is a means of determining the money supply in the national economy. And linking the different types of money in circulation in a country to each other and binding
Individuals to accept it. And determine the relationship between the national currency at home and foreign exchange.
The value of the monetary unit is determined in light of the two-metal or bimetallic base in a fixed relationship with the value and weight specified by a specific standard of
Both gold and silver are at the same time. The two metals used in the binary metal base are gold and silver which include
The base metal is one of these two metals. We find that the relationship
Between them has been identified in the nineteenth century.
The legal relationship between these two metals has been established: every 5.15 kg of silver equals 1 kg of gold.
The conditions that must be met by the state in order for the bimetallic or bimetallic base to be effective are: That the two minerals enjoy
By formal monetary arrangements, the state determines an exchange ratio between the two minerals, and that the two minerals enjoy unlimited healing power.
Under the one metal rule, gold was dominated by the only metal base.
In 1803, France adopted the binary metal rule, while in 1900 the United States adopted the gold standard.
Whereas, under the "Poincaré" law in France, the French franc was set at a weight of 55.6 kg / gold.
The most important characteristics of the gold standard: free circulation of gold coins, mandatory gold coverage for credit trading.
Among the images of the gold standard: gold coins, gold bullion, exchange with gold.
We find that the image of gold coins extended between 1821-1914 AD.
The following conditions must be met for the coins to fully function: Determining the weight and caliber of the monetary unit by the legislator, availability
Freedom to mint and smelt coins, freeing up the project. The ability to convert all other types of money in circulation, metal or paper, into money.
Gold and alloys. The state guarantees the freedom to import and export gold without restrictions to guarantee the domestic and international prices.
The reasons for abandoning the image of gold coins: the conditions left by the First World War, the increase in economic activity
Global, the relative shortfall in the quantities of gold offered.
In the period following the discontinuation of the image of gold coins, it became money: a means of financing the expansion of economic activity
And foreign exchange, financing foreign operations and government spending, meeting the requirements of national income growth.
The most important thing is called the image of gold bullion: the image of convertible bullion, standard gold, collective rule.
To follow Ricardo's gold bullion picture.
In the image of gold bullion, gold was used as a cover for banknotes to make external payments.
The most important characteristics that distinguish the image of gold bullion: the continuation of the value of the monetary unit to a certain weight of gold, the persistence of freedom
The import and export of gold. The exchange rate of currencies remains stable and stable, as is the case in the image of coins. No longer for individuals.
The freedom of minting and smelting known under the rule of gold coins.
Among the positives of the image of gold bullion: the reduction and economy in the use of gold, the concentration of gold reserves in banks
Central.
The image of the exchange with gold appeared after the First World War.. 


gold

Among the characteristics of the image of gold exchange, we find: the absence of coins or gold bars in circulation, the inability to transfer circulated coins
To gold within society. The acceptance by the monetary authorities of the sale and purchase of foreign currencies convertible into gold at a fixed price with the currency
Wataniya Covering the issue with foreign cash and securities.
As for the disadvantages of the picture of exchange with gold, they are: Creating a kind of economic dependence towards large countries The possibility of transferring monetary fluctuations
Which is exposed to the large countries to the countries that follow the same image. It has an international character without the local. It makes dependent money
Bear balance of payments fluctuations without major drivers.
The first SDR was formed from a basket of 16 currencies.
The free transfer system extended without an international base during the period between: 1931-1939 AD.
The exchange rate is determined under the system of free transfer without an international rule under the influence of quantitative and qualitative factors.
The main reason that pushed Americans to stop converting the dollar into gold is the desire to preserve gold stocks.
This happened during the era of US President Nixon in August 1971.
Among the disadvantages of the gold standard, we find: money has no intrinsic value, the quantities of gold are limited and the increase in its use, the rule no longer exists despite its existence
Use of gold.
From the advantages of the paper money base:
The monetary issuance is more flexible than under the gold standard, money management in circulation can be used
To serve the economic and social goals, allow the internal economic balance to be achieved, do not give preference to the balance
External, characterized by sophistication and optimal use of the mental capacity of the human being, the presence of quasi-money that affects the overall demand for goods.
And services, non-compliance with the golden coverage in resolving crises and wars.
For value in the domestic economy, and this
The most important difference between the paper money rule and the gold rule: Considering money as a measure
It depends on the degree of confidence in the authority that issued it.
Paper money is limited to the local scale and has no international character. The bank’s exchange is determined in light of the gold standard at a level
.
Orbit
Fixed on the basis of the amount of metal contained, and under the paper base the terminal cash becomes cash
The value of money was considered the metal basis for its acceptance in the circulation of gold and silver through the control of the "Mercantile" school in the century.
sixteen.
The correlation of the value of money with the price level goes back to Jean Bodin.
Meaning the price theory of Boulding based on the liquidity preference ratio: it represents the percentage that an individual keeps from his total resources
In the form of cash. It is the relationship that expresses money as a stock of the value or reserve of the total value of an individual's wealth.
The rise in the general level of prices means: the decrease in the purchasing power of the monetary unit.
Where we see that the relationship between the value of money and the general price level is an inverse relationship.
The relationship between the value of money and the general price level is the following figure: The value of money = 1 / the general price level.
When the money value increases by 100%, this means that the general price level has decreased by 50%.
Friedman's money is known as: a type of commodity, a means of preserving wealth, an instrument of exchange and a stock of value.
The general level of prices depends on the relationship between: money spending and the real volume of goods and services.
There is stability in the general level of prices if there is a correspondence between spending and the real volume of goods and services.
The general price level tends to rise when: Aggregate demand increases by a greater percentage than the increase in aggregate supply.
As for when the general level of prices tends to decrease, when: Aggregate supply increases by a greater percentage than the increase in aggregate demand.
The volume of cash outlay is defined as: the group of money circulating outside the banking system that a society uses in exchanging goods
And the services offered in the market during a certain period of time and in a specific place.
The money circulation hour is defined as: the average number of times a unit of money moves from one hand to another.
In order to maintain stable, stable and strong cash, it is necessary to: Exist financial institutions that give confidence as discount houses
A banker who works in perfect competition.
The relationship between the velocity of circulation of money and the increase in the monetary flow is: A direct relationship.
The size of the money flow depends on the volume of production of goods and services, which depends on: The size of the resources available to the economy
Nationalist. And on the degree of development of production art. And at the level of operating productive resources and the demand for final products.
According to traditionalists, prices are the expression of a free exchange between commodities and gold.
In the event of an increase in the purchasing power of money, prices would decrease. The creditors ’economic position would improve, and the center would deteriorate
By the transfer of the purchasing power of money from debtors to creditors.

Wealth usually consists of cash, stocks, bonds, real goods, and human capital.


The relationship of monetary mass and GNP is fixed.
The variable that adjusts aggregate output to the quantity of money is the general price level.
Those with fixed income are: owners of bonds and real estate.
The redistribution of real national income takes place other than those with fixed incomes when purchasing power is low
For money, the general price level rise.
However, this process takes place in their favor when the purchasing power of money increases.
The owners of slowly changing incomes are: workers and employees.

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