Monday, July 09, 2007

Hungarian Hyperinflation

It is estimated that the total weight of gold people have mined over the years is around 125 000 tonnes. If it were stacked, it would reach dimensions of 18m x 36m x 9m.

This massive stack of gold though, would still be worth less than the currency currently circulating the United States alone given the price of gold above.
If things got really crazy and people decided to move back to the gold standard for stability sake or something silly, it would have to be done in conjunction with a fractional-reserve policy. That is to say: banks would have to constantly loan out far more than they kept in reserves, which is something they do already.

But in Canada that hasn't been a concern since 1991.
Canada has adopted a Zero-Reserves Banking System!

I don't even understand how that's possible.

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