what exactly does “linking” a currency to gold mean? that you can walk into any bank in that nation and use their worthless currency to buy gold at a fixed rate? if so,they’d run out of gold reserves in a day or two ...
“what exactly does “linking” a currency to gold mean? that you can walk into any bank in that nation and use their worthless currency to buy gold at a fixed rate? if so,they’d run out of gold reserves in a day or two”
Correct you realize exactly the problem none of the gold bugs have.
Under the current set-up you can turn a billion in USD into 80 billion rubbles. You can then exchange those rubbles for gold worth 1.05 billion USD.
An instance $50 million profit for draining the Russian gold reserves by $1 billion.
The is a vicious circle that makes a gold pin impossible. The rubble will always trade at a discount to actual gold because there is not 100% trust Russia can keep the gold standard. There is not 100% trust because the discounted price incentivizes permanent drain on reserves.
Exact same scenario that caused Argentina’s dollar pin or the UK Deutschmark pin to fail catastrophically.