/biz/ - Business & Finance

>>55497452
I wonder how they will implement it successfully without being hit in full effect with the Gresham's law (bad money drives out good money) in a world so economically intertwined.

They will have to use this currency in a 100% closed circuit to avoid bleeding their gold (if the backing isn't just words and their currency truly redeemable, which i doubt) at the speed of light.

But now we see how some monetary policies implemented by China take all their sense, like the (almost total) non-convertibility of the yuan. Of course it already made sense for them to keep control over the exchange rates to remain competitive, but even more so if they back the yuan with gold.

But i fear it's more an "announcement effect" to further weaken the USD rather than a true policy designed to benefit the people. I think it will be most likely a second currency layered on top of the others, only dedicated to specific transactions, like arm deals/civil nuclear/avionic between governments who are part of the BRICS alliance, but it will never reach the common people.

I might be wrong tho, but it's more probable this way i think.

>>55497227
>There's no way to use real gold digitally
Of course there is, you back your currency up with it. Meaning that you continue to enjoy your numbers on a screen for ease of use, but if you desire so, they can be redeemed at any bank for their equivalent in gold and silver.
Just like it was until Nixon nuked Bretton Wood.

And you can preserve your physical PMs for the big purchases who matters, like a house or a car. Ofc it wont be very practical to buy chink plastic toys on alibaba. But what the government hates about PMs is they can't be traced, thus can't be taxed as they wish.