The Tale of Two Economies

By Chan Huan Chiang

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Fiat moneyWelcome 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...

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Chan Huan Chiang

is a senior research fellow at the Penang Institute.