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If basket of goods was priced in gold rather than dollars - then its price would also be more stable. There have been centuries when gold was legal tender and
by 1gor 18y ago
If basket of goods was priced in gold rather than dollars - then its price would also be more stable.
There have been centuries when gold was legal tender and nobody complained (apart from some emperors who found debasing gold coins by adding copper was a bit difficult; but printing press has not been invented yet).
- Retric 18y agoThink about this for a second, if you value a basket of goods in terms of oil and oil's value is fluctuating rapidly then the value of those goods also seems to fluctuate rapidly. So when you compare 2 things one of whose value is stable like USD or a basket of goods, and something else that is unstable like Gold. Then the unstable item makes the value of the other things seem to fluctuate. However, by making several comparisons you can determine that the ratio of USD to basket of goods is stable but gold vs USD or Basket is unstable so it's Gold that is unstable.