The gold standard was so named because all important national currencies were referenced to it. The UK for example was referenced with sterling being 113 grains of pure gold. The philosophy behind the gold standard was that it provided lenders with an assurance that what they had advanced to borrowers would not be devalued by a devaluation of the currency. The theory was all well and good, but in practice the distribution of gold between leading economies and the currencies exchange rate into gold and the competitiveness of those economies was poorly correlated.
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Foreign Exchange Forex and Wall Street Crash
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