The Research Of Monetization And Demonetization Of Gold

Gold is a commercial product with financial attributes, commercial property, and monetary attributes.In the year of1816, Britain formulated Gold Standard Act, and first implemented Gold Standard in1821. After the seventies of nineteenth century, countries in Europe, the United States and Japan followed the trend one after another, making it become the earliest international monetary system. This Gold Standard System centered with gold-pound maintained for around30years, and was disintegrated when the First World War broke out. After the war, it formed international gold exchange standard system, which was abandoned by all countries till1936. And the Gold Standard System correspondingly crumbled, replaced with Monetary System circulating by paper currency.The Bretton Woods System with the center of dollar-gold, which was built after the Second World War, established the special position of the international monetary system. The Bretton Woods System only lasted for less than30years, because it has serious defect.From Apr1,1978, Jamaica Agreement came into effect officially, the international monetary system entered a new era, with the so called name of Jamaica System. It became the first system in history to have Credit Money as a standard currency. From the legal aspect, the fixed officially exchange price (gold and dollar) was cancelled, and the gold price could fluctuate freely as the supply-need relationship in the market. The international financial market lost the unified basis and standard of the formulating of monetary exchange rate. Gold was reduced to a common noble metal commodity. Gold reserve was not as a medium of payment to balance the international payment deficit. Finally, the demonetization of gold became real.However, with the development of the world economy and the deepening in the field of finance, the instability of Credit Money gradually appears. The increasing risk, combined with the devaluation of dollars, provides with the objective requirement of re-monetization of gold. Though Credit Money has made great contribution to the world economy’s development, no other international monetary could replace gold up to now. Thus, gold’s monetary position still exists. It is closely related with gold’s value entity, credit and solvency, and any other assets could not compare with that.The realization of re-monetization of gold turns gold back to the field of circulation, and it still has the monetary function in the international monetary system. The realization of re-monetization of gold means significantly to the reform of the international monetary system.