Please refer to the following information, maybe you are inspired by the 19th century gold standard

World currency, gold and silver have a world currency. Later, with the widespread establishment of the gold standard, gold gained dominance.

As the international currency gold under the gold standard, gold plays a role not only in the domestic currency and the national economy, but also in international relations and the world currency. Only gold constitutes an international reserve currency to cover the difference between the balance of payments. Gold production can be freely entered, and a country's currency can be exchanged for gold at a freely fixed price. International mobility is different from domestic mobility. Domestic circulation is within the scope of a country's sovereignty. Currency circulation is determined by the country's laws, price standards, coin shapes, symbols and values, and the organization and tradition of coins will be designated by the country based on its own economic conditions. The currency that circulates internationally appears in its original form, in the form of gold bars. Coins are in circulation throughout the country at their nominal value. Dai coins (within the specified range) can be used for the full value of the same coin. The nominal values ??in their world market are completely meaningless and are calculated in terms of their actual weight and fineness and are used in the form of gold bars. Since a dishonored bill has no value in itself and is not valid in the world market.

The gold exchange rate serves as the world currency, resulting in the international circulation of currency and gold. Foreign currency exchange has become an important part of international trade. In order to make payments for foreign trade, it is necessary to exchange currencies and foreign currency counterparts, or exchange with various currencies and gold stages that act as world currencies. Since the local currency lost its currency as the world currency boiled down to a certain amount of gold, the currency of one country could be used to represent another country's currency. The value of each country's currencies compared to each other is based on a certain exchange ratio, that is, the currency exchange rate. The stability of the exchange rate between gold and other countries' currencies and a country's currency is one of the important conditions for the normal development of international trade. To do this, the world's currencies need to maintain a stable currency parity, a freely convertible currency that can be converted into a certain amount of gold at any time.

The world currency that circulates among countries to pay for international gold leads to the international circulation of gold. The balance of payments and exchange rate changes between countries, while constantly moving from one country to another. This flow is spontaneous and depends on the state of international politics, economics and the external political and economic relations of each country. The former is a reflection of, but also affected by, the latter. However, gold circulates as a world currency and moves as a commodity in international arenas of different nationalities. For example, when a gold-producing country sells its gold production abroad, gold is exported as a commodity rather than functioning as a world currency.

In order to realize the international flow of gold, each country must maintain a certain gold reserve. A country's gold reserves serve as its reserve currency in the world, but are also cashed in by the country's bank banknotes for circulation and reserves. The contradiction between these two functions of each gold reserve, when it is used for domestic circulation, will affect its function as a world reserve currency, and when it is used for international circulation, will affect the operation of its domestic reserves. When capitalist countries stop the flow of gold within the country, the world's gold reserves will only perform the function of currency reserves.

The economic adjustment mechanism of gold and the US dollar under the gold standard plays a self-regulatory role in the exchange rate of the world currency gold output and input. This mechanism allows the exchange rate to fluctuate within a certain range. Since currency can be freely exchanged for gold at a fixed price, and gold is freely exported and imported, when the US dollar rises to a certain extent, the cost of purchasing foreign currency to cover the use of gold is more than the price of gold output (equivalent to gold plus freight), and people will direct foreign investment. Gold is paid for output instead of buying foreign currency; conversely, the exchange rate will not drop too low. Therefore, although the exchange rate fluctuates, it can remain relatively stable.

Gold export and import will have an impact on the domestic economy and foreign economic relations. Monetary gold reserves are the backbone of the entire credit system. When gold production reduces domestic gold reserves to a certain limit, in order to prevent further losses of gold, the monetary authorities will increase interest rates and shrink credit, thereby slowing down the economy or even declining, so commodities Inputs and external payments decrease; on the contrary, the inflow of gold and gold reserves increases, prompting interest rates to fall and credit to expand. Changes after the collapse of the gold standard In the era of imperialism, the gold standard tended to collapse. Gold was withdrawn from the domestic circulation currency and the national credit currency circulation was not fully realized.

Reference: http://www.pinggu.org/bbs/ X_AdvCom_Get.

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