A govt. print currency, it has to deposit the equal amount of Gold with the Central Bank of the Country .why?

Question

A govt. print currency, it has to deposit the equal amount of Gold with the Central Bank of the Country .why?

Answer 1

This would only be done in a country that backs its currency with gold. Doing such insures the value of the currency. It can't be excessively inflated so that money is created out of thin air.

Few countries do this. The US doesn't.

Answer 2

This is called "Backing your currency" with gold.  It would make your currency inflation proof.  Your currency would be honest money, and your citizens and citizens of other nations would value it.

No country in the world does this anymore.

Grandpa

Answer 3

tradingsolution.org to sites on the

Internet for forex!

Browse our resources or just

try the search

http://tradingsolution.org/