...the book, a gold standard is a diagnostic test that is assumed to be able to determine the true disease of the patient. The gold standard is said to have known validity and reliability, and is used as a benchmark in which other diagnostic tests (screening test) are compared to. In the study, hearing loss is observed in one hundred and seventeen patients with a history of hearing loss, undergoing pure tone audiometry (PTA) for the first time. The patients in the study were divided into two groups, one of which reported increased TV volume and the other reported no increase in volume. The screening test in the article is the diagnostic utility of using television volume as a marker for hearing loss. This screening test is compared to the gold standard for hearing loss which is known as a pure tone audiogram (PTA). Each patient’s PTA was used as a reference standard. The results of the experiment indicated that if the patient reported viewing television with an increased volume, then there was a 68 per cent chance of the patient have a hearing loss of 25 dB or more. Although the study concluded that self-reported television volume can be a useful screening tool in patients presenting with hearing impairment, it is not very specific and should not be used to replace the current gold standard to measure hearing loss. Increased television volume had a sensitivity of 81 per cent and a specificity of 52 per cent as a predictor of hearing loss. A hypothetical ideal gold standard test has...
Words: 376 - Pages: 2
...much of his Presidency. One controversial decision FDR made was to remove the US from the Gold Standard which he did in June of 1933.1 The Gold Standard is a monetary system in which currency is backed by gold. The decision to remove the United States from the Gold Standard came as a result of the tremendous economic hardship of the Great Depression, which Americans had already been enduring the symptoms of for several years before FDR took office in 1932.2 The Gold Standard was not plausible according to many economic experts because with the Depression came staggering unemployment numbers as high as forty percent in some parts. Nearly 13 million people were out of work when Roosevelt took office.3 Whitehouse.gov Many people lived in extremely crowded living arrangements especially people of color. In 1913 the Federal Reserve was created, it was suppose to alleviate the fears of American account holders and prevent run on from banks in two ways: It could provide a vehicle for banks to borrow cash during times of stringency; therefore, satisfying their customer’s needs. The other avenue the Fed had was to create a new form of currency or Federal Reserve Notes. 2 ________________________________________________________________ 1. “FDR takes United States off gold standard,” The History Channel website, http://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard (accessed Apr 26, 2014). 2. Elkwell, Craig K....
Words: 972 - Pages: 4
...org/2009/02/gold-standard-explained.html https://books.google.co.za/books?id=tuP0CAAAQBAJ&pg=PA140&dq=Gold+Standard+explained&hl=en&sa=X&ved=0CBwQ6AEwAGoVChMIwNPEmLHExwIVRdYUCh3QlArs#v=onepage&q=Gold%20Standard%20explained&f=false http://econ.economicshelp.org/2009/02/gold-standard-explained.html Verskaf ‘n kort geskiedenis van die Goue Standaard as ‘n internasionale monetêre stelsel, en verskaf argumente teen die terugkeer na die Goue Standaard. / Provide a brief history of the Gold Standard as an international monetary system, and provide arguments against returning to the Gold Standard. Introduction Body. The Gold Standard was a monetary system where the standard unit of currency was a fixed weight of gold at a fixed price with an intrinsic value. The Gold Standard system fixed the value of paper money (also known as fiat money), which circulates as a medium of exchange, by allowing it to convert into a certain amount of gold on demand. Furthermore, the rates of exchange between national currencies were also fixed. The advantage of the gold standard is that the amount of gold was relatively stable. It means that governments couldn't print money and create inflation. It also created confidence in the financial system. From 1871 till 1914 the Gold Standard was at its pinnacle. During this period, there were near perfect political contexts which existed. Governments tried to cooperate in order to make the Gold Standard system work...
Words: 762 - Pages: 4
...Fiat Currency Vs. Gold Standard To understand the difference between Fiat Currency and Gold Standard you must first know what each of these terms mean. Fiat currency is a common typre of currency whose value is based on the issuing authority’s guarantee to pay the stated amount on demand, and not on any intrinsic worth or extrinsic backing. The Gold Standard is a monetary system in which a country’s government allows its currency unit to be freely converted into fixed amounts of gold and vice versa. The exchange rate under the gold standard monetary system is determined by the economic difference for an ounce of gold between two currencies. Gold has been used as a currency of choice throughout history. In fact, the earliest known use was in 643 in lydia, present day Turkey. As well as the gold, silver was also used for monetary currency. For example, during the Middle Ages, the Byzantine Empire used gold coins what are known as Bezant. This currency was used throughout Europe and the Mediterranean until the Byzantine Empire’s economic influence started to decline and most of Europe tended to see silver as the currency of choice instead of gold. The United States also used the Gold Standard 1900 to 1933 after Bimetallism fell through, with the passage of the Gold Standard Act, which provided that: “...the dollar consisting of twenty-five and eight-tenths grains (1.67 grams) of gold nine-tenths fine, as established by section thirty five hundred and eleven of the Revised...
Words: 678 - Pages: 3
...Disadvantages of the Gold Standard Angelina Di Mauro BUS 450 Wendy Achilles July 14, 2012 The Advantages and Disadvantages of the Gold Standard The Gold Standard is a historic monetary system in which the standard unit of account is a fixed weight of gold, and though the main benefit is that it insures a relatively low level of inflation, economies on the gold standard are less able to avoid or offset either monetary or real shocks. Gold has been known as the currency of choice throughout history, and at one point in time the country that had the most gold was known to be the wealthiest. By the eighteen hundreds many countries began to seek new ways to produce wealth through standardized transactions. As a result the gold standard was adopted as means to exchange currency in a new world market, and means to regulate the production of paper money in world economies. The following will highlight both the advantages and disadvantages of the historic gold standard monetary system. The paper will come to a conclusion with an emphasis on why many countries had to abandon this momentous means of exchange. According to one source, “the gold standard was a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National money and other forms of money, i.e. bank deposits and notes, were freely converted into gold at a fixed price” (Bordo, pg 1 ¶1). In a new world market the gold standard was a way to determine...
Words: 1086 - Pages: 5
...In Sixteenth-and seventeenth-century, the precious metals - silver was assigned as standard currencies by British government. The value of the coins was reflected by the bullion value that was the radio of the metal content to denomination. However, the England silver coinage were threatened by some unethical individuals and governments’ actions that physically alternated, debased, devalued, or revalued it. (Black, Module 4, Topic 4.4). The manual minted sliver coins at the time were often irregular in size and shape. Besides, after periods of usage, the old sliver coins were naturally worn and torn which normally had thinner edges. The bullion content of these coins became less weight than legal coins. Some unscrupulous speculators took a chance that deliberately minted with short-weight bullion content, or physically clipping or filling little segments of precious metals from the proper coins. The silver chips would be collected and illegally melted by individuals, then smuggled to the foreign countries. “When the debased money was circulating along the legal coins, the latter will tend to be exported, leaving only the inferior money in the circulation.” Gresham described these unethical practices as “bad money drives out good”. (Black, Module 4, Topic 4.4) Because the clipped coins were not liable to the public, it was habitually accepted only for less than their stamped value. On the other hand, people tended to use these suspicious coins to pay taxes. Oppositely, the British...
Words: 803 - Pages: 4
...many advantages as well as disadvantages of converting to a gold standard medium of exchange. It is described in Sean Williams' article "Would Donald Trump Really Put America Back on the Gold Standard?" One beneficial aspect of a precious metal backed monetary system would be that changing to another monetary system could result in the destabilization of economy (Williams 1-2). Williams concludes by describing why a gold standard would be disadvantageous. Williams has written many articles for the Motley Fool and has a B.A. in Economics. He has been writing for the Motley Fool since 2010 and often writes about macroeconomics and marijuana. He explains that although money backed by precious metals, usually are stable in value, sometimes...
Words: 1708 - Pages: 7
...Introduction The gold standard is a special form of monetary system whereby the standard unit economic account relies upon a fixed mass of gold (Mayer 76). With respect to this definition, the gold standard is thus a monetary system whereby the value of currency of a given country is determined by a fixed mass of gold. In addition, the domestic currency of such a country can easily be converted into gold. To ensure that the domestic currency of a country can easily be converted to gold, the amount of money that is in circulation is normally equivalent to the gold reserves that that a specific country has. In addition, countries that use the gold standard usually make their international payments in gold. The exchange rates between countries normally remains constant. This is due to the fact that their currencies are valued using their gold reserves that are based on the specific gold weights. As a result, no country can take advantage of the other in the course of international trade. Ever since the days of early civilization, precious metals and stones have been used as a medium of exchange. In ancient Egypt, Rome, Greece, China and India, precious metals and stones have been used as a medium of exchange for goods and services in both domestic and international trade. Gold, silver and bronze were perhaps the most widely used metals during those times. This is because they held desirable properties that made them fit for these purposes. They were portable, rare, difficult...
Words: 1522 - Pages: 7
...being passed on to our children and grandchildren is to go back on the gold standard. Under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard. (Alan Greenspan "Gold and Economic Freedom" CUI 96) The government initiates a credit con game, as it borrows money from the producers, which is to be re-paid with money it will borrow from you the day after tomorrow, and so on. This is known as deficit spending, and is made possible by the fact that the government cuts the connection between goods and money. It issues paper money, which is used as a claim check on actually existing goods, but that money is not backed by any goods, it is not backed by gold, and it is backed by nothing. It is a promissory note issued to you...
Words: 377 - Pages: 2
...economies worldwide. However, the evolution of the world economy has occurred so rapidly that it has outpaced its regulators (Schwab, 2012). The International Monetary System, in accordance with its mayor international currencies, has been faced with a myriad of challenges. In this era of free global trade, the present dollar-based system is being forced to change (Schwab, 2012). With much speculation and evolving ideals, the most plausible solution has been the multipolar currency system based on the euro, dollar, and RMB (Schwab, 2012). In order to ensure a crisis-proof economic system, however, some economists believe this tripolar system must be backed by a Central Bank, an improvement in monetary regulations, and perhaps an induction of gold as a hedge and safe-haven asset. Introducing a World Central Bank within a three-currency monetary union: would this lead to greater stabilization and coordination of Macroeconomic Policies among countries? Some countries such as Germany have expressed interest in researching new alternatives to the existing rate regime, considering that neither of the two poles (fixed or flexible) are completely appropriate (Belke, Bernoth and Fichtner, 2011). According to Belke et al, the best and most suitable system would be one with only a few big currency areas, interconnected to each other by flexible exchange rates (Belke, Bernoth and Fichtner, 2011). Furthermore, the best “multi-polar key currency system”should be compelled by: the US Dollar, the...
Words: 3274 - Pages: 14
...A large number of criticisms have been leveled against the United States federal reserve system. Conduct a web search on the criticisms about the system. Do you agree with these views? Why or why not? What changes would you recommend to the system? Criticisms of the Federal Reserve have existed since its evolution and official inception with democrats wanting the Central Bank to be out of the hands of Wall Street control. Some of the more interesting characters who have criticized aspects of the Federal Reserve are profiled below along with my input. CHARLES AUGUST LINDBERGH Lindbergh stated that "The problem of private banks working against the best interests of the citizens: The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money." [Lindbergh]. When the President signs this act [Federal Reserve Act of 1913], the invisible government by the money power -- proven to exist by the Monetary Trust Investigation -- will be legalized. The new law will create inflation whenever the trusts want inflation. From now on, depressions will be scientifically created. [Lindbergh2] I believe Lindbergh, a Democrat, had foresight into the possible dangers that were realized later with the Great Depression. He was justified in his belief that the Federal...
Words: 1631 - Pages: 7
...T. TARIMAN PROFESSOR - ENGLISH II FEBRUARY 8, 2013 TABLE OF CONTENTS CONTENTS PAGE PRELIMINARY PAGE Title Page Table of Contents Outline CHAPTERS 1 Introduction Overview of the Topic 2 Discussion 3 Conclusion BIBLIOGPAPHY CURRICULUM VITAE ii INTERNATIONAL BANKING: HISTORICAL SYNTHESIS OF THE BASIC PROBLEMS AND DEVELOPMENTS OF THE MONETARY AND CREDIT SYSTEMS DURING THE 19th AND 20th CENTURIES Thesis Statement: Our historical synthesis focuses on the economic and political aspects of banking, with questions of industrial management and the credit economy taking second place. OUTLINE I CURRENCY AND MONETARY HISTORY IN THE 19th CENTURY 1 From Silver and Bimetal Currency to Gold Standard 2 The Development of the Bank Note into a Legal Tender A Bank Notes and Issuing Banks in England until Mid-19th Century B Peel’s Bank Charter Act C The Banque de France in the 19th Century D Overcoming the Federal System of German Issuing Banks E The United States’ Arduous Journey Towards the Federal System II BANKS AND BANKING FROM THE EARLY PHASE OF INDUSTRIALIZATION TO THE MIDDLE OF THE 19th CENTURY iii 1 Bank Types at the Beginning of the 19th Century A Private Bankers B Public Banks C State Banks 2 The State Loan Business and the Political Role of Private Bankers 3 The Financing of Railway Construction 4 The Financing of Early Industry 5 The International Financing Power of the Rothschilds III...
Words: 1509 - Pages: 7
...short term loans to financial institutions as a last resort. The role of lender of last resort provides apossible fail safe in providing liquid assets to cover immediate losses of solvent but illiquid firms. 3.) Long and short term illiquid assets and liabilities could contribute to a financial panic if there is a run on a financial intuition as they would not be able to liquidate the amount needed. B.) Illiquid banks do not have the money available to cover monetaryobligations. An insolvent bank owes more than it owns. 4.) Among a few of the events, the StockMarket crashed in 1929, financial repercussions from WW1, the structure of the international gold standard and The Fed failure to be a lender of last resort having too tight of a monetary policy, all contributed to the economic melt down. The gold standard held rates higher than most anyone could actually afford. Output fell due to no investments and no money to pay for production. Over 9700 banks suspend operations between 1929 and 1933. 5.) The establishment of the FDIC in 1934 was a very successful tool in helping the economy stabilize and stopping bank runs, in turn helping to stop the massive bank closure...
Words: 258 - Pages: 2
...What was the Bretton Woods system? Outline its main pillars and discuss to what extent, if any, its architecture led to both post-war stability and prosperity in the developed world throughout capitalism’s ‘golden age’ “50 Years is Enough” In the final months of the Second world war, an architecture of stability for the international economy emerged. The United States and Britain, having already committed to each other with the signing of Mutual Aid Agreement(1941)1, vied to create a multilateral economic system to replace the international gold standard and its structural rigidity. The Bretton Woods agreement of 1944 established a dollar-gold standard of fixed, but adjustable, exchange rates of $US35 an ounce2. Which, according to Milton Friedman, “carried within it the seeds of its own destruction”3. The Institutions of neo-liberal global economic governance4, were formed; International Monetary Fund, & International Bank for Reconstruction and Development. The Twin Pillars of post-war order5, an “economic super-government”6 essentially adopting both; U.S. Inflation rates.7 and US political policies8. There has been no country in history that has emerged from war into such happy economic circumstances as the United States in 19459. General Maximum Price Regulation(1942) was signed after the attack on Pearl Harbour, controlling most prices beneath a price ceiling until '46, and imposing penalties on violations. In addition to a comprehensive ration system. In order to maximise...
Words: 1986 - Pages: 8
...Bretton Woods Agreement Definition: The Bretton Woods Agreement is the result of a 1944 meeting in Bretton Woods, New Hampshire involving delegates from forty-four countries following World War II. The resulting agreement established a fixed rate exchange system, the International Monterey Fund (IMF) and the World Bank. This also included an exchange rate agreement, also known as the gold exchange standard. (Satterlee, 2009, p.157). Summary: A Bretton Woods for innovation This article by author Stephen Ezell highlights one of the issues overlooked upon the conclusion of the 1994 meeting, policies governing innovation. “We need a new international framework that sets clear parameters for what constitutes fair and unfair innovation competition, creating new institutions (and updating old ones) that maximize innovation” (Ezell, 2011, para. 1). Ezell begins by defining the current policies in play concerning innovation and providing examples. Ezell breaks down countries’ policies into four categories, “Good”, “Bad”, “Ugly” and "Self-destructive". “"Good" innovation policies include increasing investments in scientific research; offering research and development tax credits; welcoming highly skilled immigrants; providing strong science, technology, engineering, and math education; and deploying advanced information and communications technologies” (Ezell, 2011, para. 4). “"Bad" policies are strategies like import substitution industrialization that a country believes will...
Words: 1106 - Pages: 5
