Part of the appeal of the metal is that it cannot be created easily, as with paper money.
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There is abundant empirical evidence that the world economy will create many more jobs with its currencies convertible into gold than with paper money.
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We hear that productivity (what dollars represent) has not kept up with the increased paper money supply.
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History is replete with examples of the inevitable failure of paper money systems, from our own founding days, to inter-war Germany, to the monetary crisis of 1970s Latin America.
Rather than lose money, they stocked their shelves with toilet paper, or tried to dodge price controls by modifying their products.
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Low investment-grade paper still gets my money because the yield disparity with 10-year Treasuries, at least 300 basis points, is still attractive if you believe Treasury yields stick near 3% for a year or two.
The Greek problem is also a euro problem, and the euro problem is a paper-money-backed-by-nothing problem coupled with high levels of debt.
Now with gold over valued, silver coins disappeared from circulation and gold coins (and paper money) dominated the currency.
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Federal anti-money-laundering regulations increased compliance costs and bureaucracy for conventional banking with the paper trail.
But it would take a disaster to bring back the days when the only sensible thing to do with one's money was to spend it immediately, or else invest it in government paper.
In 2000, Knutson published the first paper using magnetic resonance imaging to photograph what goes on in the brain as people deal with money.
Some of these countries have used polymer only for commemorative bills: these include China, where paper money was first used in the seventh century, and Brazil, where an experiment with plastic in 2000 proved unpopular.
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The news will likely be greeted by staff with the same sort of enthusiasm with which soccer clubs have greeted their wealthy new Muscovite owners, not least because the paper has been hemorrhaging money for several years.
The Federal Reserve responded with several programs, including a facility to finance bank purchases of high-quality asset-backed commercial paper from money market mutual funds.
One large company, the paper firm Venepal (now Invepal), was confiscated earlier this year and put back into operation with government money under a co-management scheme.
Pretty soon, the ECB, with hundreds of billions of this paper in its vault, will be able to announce that it too has made money just like the Fed!
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