Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
CHARACTERISTICS OF THE GOLD STANDARD<br />
<strong>the</strong> ages," <strong>and</strong> most of it can readily be made marketable,<br />
since it is largely in relatively unspecialized<br />
forms, such as coins <strong>and</strong> bars. The world's annual<br />
production of gold, which, for a number of years<br />
prior to <strong>the</strong> Second World War, was approximately<br />
equivalent to only about 4 per cent of <strong>the</strong> world's<br />
known stock of monetary gold, acts very slowly in<br />
affecting <strong>the</strong> value of such a large marketable sup'ply.<br />
The Dem<strong>and</strong> for <strong>Gold</strong>, Highly Elastic<br />
<strong>Gold</strong> is a commodity of highly elastic dem<strong>and</strong>; in<br />
fact, it probably has <strong>the</strong> most elastic dem<strong>and</strong> of all<br />
commodities on <strong>the</strong> market in a gold-st<strong>and</strong>ard<br />
country. All three of <strong>the</strong> principal kinds of dem<strong>and</strong><br />
for gold are highly elastic; They are (1) <strong>the</strong> monetary<br />
dem<strong>and</strong>, (2) <strong>the</strong> dem<strong>and</strong> for <strong>the</strong> purpose .of ornamentation,<br />
including jewelry <strong>and</strong> utensils, <strong>and</strong> (3) <strong>the</strong><br />
hoarding dem<strong>and</strong>.<br />
The Monetary Dem<strong>and</strong>. The dem<strong>and</strong> for gold<br />
for monetary uses is obviously highly elastic when<br />
<strong>the</strong> principal countries of <strong>the</strong>' world are on a gold<br />
st<strong>and</strong>ard <strong>and</strong> when <strong>the</strong>se countries are offering to<br />
buy at fixed prices in unlimited amounts all <strong>the</strong> gold<br />
offered to <strong>the</strong>m for monetary purposes.<br />
The Dem<strong>and</strong> for Ornamentation. The dem<strong>and</strong> for<br />
gold to use in ornamentation is likewise highly<br />
elastic. Primitive man's first form of clothing was<br />
probably some form of paint or mud on his skinin<br />
o<strong>the</strong>r words, ornament. Clothing for protection<br />
came later. The desire for ornamentation from that<br />
[ 141 ]
Change language