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Minimizing Resource Costs under a Gold Standard: From Warehouse Deposits to Deposit Banking
Originally published in Journal of Economics and Finance Education
One of the criticisms of the gold coin standard is it entails more resource costs than other systems. Why after all should people have to carry around bags of gold for each transaction and pay to have so much of it stored in vaults?
One of the criticisms of the gold coin standard is it entails more resource costs than other systems. Why after all should people have to carry around bags of gold for each transaction and pay to have so much of it stored in vaults? In this piece I will discuss the options of one famous lover of gold, Scrooge McDuck, and discuss how the storage cost criticisms of gold money are unwarranted. A system can easily evolve from one where people held coins to one where they loan their commodity via bankers and earn interest thereby eliminating the large need to store or handle the actual commodity.
Find the article at the Academy of Economics and Finance.
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