Page "Gold standard" Paragraph 55

A 100 %- reserve gold standard, or a full gold standard, exists when a monetary authority holds sufficient gold to convert all of the representative money it has issued into gold at the promised exchange rate.

It is sometimes referred to as the gold specie standard to more easily identify it from other forms of the gold standard that have existed at various times.

Opponents of a 100 %- reserve standard consider a 100 %- reserve standard difficult to implement, saying that the quantity of gold in the world is too small to sustain current worldwide economic activity at current gold prices ; implementation would entail a many-fold increase in the price of gold.

However, proponents of the gold standard have said that any amount of gold can serve as the reserve: " Once a money is established, any stock of money becomes compatible with any amount of employment and real income.

" According to them the prices of goods and services will adjust to the supply of gold.