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The gold standard is a monetary system in which the value of the currency unit (the Canadian dollar, for example) is defined in relation to the value of gold. Gold had the ability of free movement around countries.
The monetary authority in the country (which was the Department of Finance in Canada until 1935 when the central bank, the Bank of Canada, was established) then commits itself to buying and selling gold at this fixed price.
The foundation of the gold standard is that a currency's value is supported by some weight in gold. Inherently, it makes sense to value currency by some tangible and precious resource, otherwise, currency is just paper bills. Therefore, by tying paper money to an amount of gold, it gives the holder of the paper money the right to exchange her paper bills for actual gold.
Ideally, this requires that paper money be readily exchangeable for gold. If a bank does not have gold, then the paper money has no value. But theoretically, actual gold would flow between nations to ensure that all currencies would be supported by gold.
A pure gold standard was used between the 1879 and 1914 by many modern trading nations. Under the gold standard system, all participating currencies were convertible based on its gold value.
Mining activities require the clearing of large areas of land. The chemicals used in the mining process often escape into the environment causing large scale pollution.
Besides clearing the mining area, vegetation in the adjoining areas also needs to be cut in order to construct roads and residential facilities for the mine workers. The human population brings along with it other activities that harm the environment.
pollution: Chemicals like mercury, cyanide, sulfuric acid, arsenic and methyl mercury are used in various stages of mining. Most of the chemicals are released into nearby water bodies that leads to water pollutants.
In spite of tailings (pipes) being used to dispose these chemicals into the water bodies, possibilities of leakage are always there. When the leaked chemicals slowly percolate through the layers of the earth, they reach the groundwater and pollute it. Surface run-off of just soil and rock debris, although non-toxic, can be harmful for vegetation of the surrounding areas.
According to later analysis, the earliness with which a country left the gold standard reliably predicted its economic recovery. For example, Great Britain and Scandinavia, which left the gold standard in 1931, recovered much earlier than France and Belgium, which remained on gold much longer. Countries such as China, which had a silver standard, almost avoided the depression entirely.
The connection between leaving the gold standard as a strong predictor of that country's severity of its depression and the length of time of its recovery has been shown to be consistent for dozens of countries. With the value of gold up, this meant that every country could rely on their paper money for the value of gold.
The real value of the dollar lies in the wealth of the county and in what the dollar can buy here and in other parts of the world. For a high amount of gold needs a high value of the dollar.
The World Bank is an agency in the United Nations, but in practice is independent by its 184 countries.
The world bank came out of the Bretton Woods agreement.
The World Bank provides loans to less developed countries, but in order to get these loans the countries have to meet certain requirements.
These requirements include: reducing corruption, increasing democracy, and adapting to Western- style free market conditions.
Another common requirement is to reduce government spending on social programs, this practice has been criticised by opponents of globalization saying that the free market reform policies are often harmful in receiving countries.
The International Monetary Fund also came out of the Bretton woods Agreement. Its purpose is to work together with the World Bank to bring stability to international monetary affairs to help expand world trade.
IMF is the agency of the United Nations.
IMF is in charge of monitoring exchange rates and providing short-term financial assistance.
The IMF is primarily funded through quotas which are proportional shares that member countries pay.
The IMF helps us by managing our financial affairs and keeping Canada a float. They charge us money to keep us stable. The IMF monitors exchange rates and it provides financial assistance to communities, who are in a financial downfall. Thus we rely on them for financial assistance and they rely on us for money to help expand our countries world trade and help stabilize our Monetary affairs.
This is Globalization in the workings. Communities and companies working together to create something better for everyone.
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