The Tale of Two Economies


Fiat money

Welcome to the world of derivatives where nothing is worth a lot!

In the old days, money had its equivalent value in gold – the value of an ounce was US$35 – as agreed upon under the international monetary order created in 1944 at Bretton Woods in New Hampshire. All other currencies were convertible to the US$ at a fixed rate and in turn convertible to gold (the actual gold was stored at Fort Knox in Kentucky; in the 1964 James Bond movie, the villain Goldfinger tried to bomb Fort Knox to wreck the US economy).

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