1. By P.Hu from the HAN university in the Netherlands
The gold standard
By P.Hu from the HAN university in the Netherlands

2. INDEX What is the gold standard? History of the gold standard
Kinds of gold standard
Modern history
Advantages
Disadvantages
Failure of the gold standard
Summary
After the standard

3. What is the gold standard?
“We have gold because we can not trusts governments” – President Herbert Hoovers to Frank D. Roosevelt.

4. Monetary system based of gold
The value of a currency was based on gold
The “exchange rate” was fixed
Different kinds of Gold standards

5. History of the gold standard
The primitivist form of the gold standard dates back to 643 before Christ in Lydia. (modern day Turkey)
In those times, the country with the most gold was the richest country.
This fueled explorations to new land to find gold.

6. Why gold? Low melting point Relative rare Wont rust or explode
Its beautiful

7. Gold Exchange standard
Kinds of gold standard
Gold Specie standard
Gold Bullion Standard
Gold Exchange standard

8. Specie standard
The unit of currency is either based on the value of a gold coin that is in circulation, or has the same value as that gold coin.
Actual use a gold coin, or a coin with the same value of a gold coin.

9. Bullion Standard
Gold Bullion standard. A gold bullion (bar) is available on demand at fixed price in exchange for circulating currency.

10. Exchange standard
A gold exchange standard is a monetary system where a government guarantees a fixed exchange rate to a foreign currency that uses a gold specie or gold bullion standard.
p.s. Note on the right just for visual purposes only.
Funfact: 1 Dollar is 35,000,000,000,000,000 Zimbabwean dollars.

11. Modern history of the gold standard
First put into operation in Great Britain in 1821
For the next 50 years bimetallic regime of gold and silver was used outside great Britain, but in the 1870s a monometallic gold standard was adopted by Germany, France and the United states. Other countries followed.
This shift occurred because of recent gold discoveries in North America thus made gold more plentiful.

12. Pros of the gold standard
It was an easy system to introduce and operate
It provided for a very high level of stability in exchanges rates which promoted international trades and investments
It provided a fully secure system for settlement of international transactions
Built in self-regulating and stabilizing system.
Price for gold was $20.67/oz ($ / kg)

13. Cons of the gold standard
The cost of manufacturing gold gradually increased to levels beyond the official prices. The resulted in a stoppage of gold production which had adverse effect for the countries liquidity
Countries with persistent trade deficit suffered from recessions resulting in reduced investments and unemployment
The system had no flexibility to adjust money supply in times of economic crisis such as disasters, war, recession.
To avoid the negative effects of reduced money supply, countries would break the equality between gold reserves and money supply, thereby “making” there own rules in the system.

14. Failure of the gold standard
The failure of the gold standard can be tributed by two events in history in combination of the disadvantages of the gold standard.

15. World war 1

16. The great depression

17. Full gold standard Ended in 1937
To avoid adverse balance of payments
To prevent gold exports falling into the hands of the enemy

18. Summary of the gold standard
Reign of the full gold standard was short. Only lasting from 1870s till the first World War
1870s
By 1928, the gold standard was implemented again although by a different form (exchange vs bullion standard)
1928
Roosevelt nationalizes gold
1933
The gold standard collapsed again during the great depression of 1930s and by 1937 not a single country remained on the full gold standard.
1937
Representatives from the U.S. and 43 other countries meet to normalize commercial and financial relations
1944
The US completely severed the link between the dollar and gold in 1971.
1971
On December 31, President Gerald Ford permits private gold ownership again in the U.S.
1974

19. Years After the Full gold standard
Executive order requiring all gold coins, bullion and certificates to be turned over to the Fed at $20.67 per ounce.
Purely fiat monetary system since 1976
Governments now have tools to fight recessions or other disasters because of control of money supply.
Currency isn't backed by a physical commodity

20. Will the gold standard come back?

21. Short answer. No.

22. A return to the gold standard in any form is nowhere on anybody’s horizon.
Former Federal Reserve Chairman Alan Greenspan, who has consistently supported the idea that gold is money, agrees, telling the Gold Report in 2013.

23. Questions?
Thanks!

24. Winner gets a bar. A chocolate oreo bar.
I have some for you 
Winner gets a bar. A chocolate oreo bar.