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Even with a gold standard, you're usually not using gold coins directly (if only because it's hard to make coins for smaller denominations with it), but rather
by creshal 11y ago
Even with a gold standard, you're usually not using gold coins directly (if only because it's hard to make coins for smaller denominations with it), but rather bank notes that are guaranteed to be redeemable for gold (as long as you don't try it out).
cf. https://en.wikipedia.org/wiki/Gresham's_law https://en.wikipedia.org/wiki/Gresham's_law
- PepeGomez 11y agoIndeed, but they are still representations of gold and are for all legal purposes equivalent to gold. When you convert them to gold, you don't spend money on gold, since they are one and the same and you can convert the gold back at any time. It's technically not different from changing banknotes to coins or wwithdrawing cash from your bank account. I don't see why you think that the link is relevant. It would apply if there were gold and silver standards simultaneously, for example, but that's not what is being discussed.