Why are IMF members not allowed to use gold as currency for transaction?

Wickama · 2015-07-03T08:15:26+00:00

Viongozi, A few years ago Ron Paul, who has been a presidential candidate in the US struggled to get an answer from the US treasury and the IMF as to why member states of the IMF are not allowed to peg their currency values on gold (only the US dollar is allowed). To date neither office has replied to his query. Dear Sirs: I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency. This policy could delay a countrys recovery from an economic crisis and retard economic growth, thus furthering economic and political instability. I would greatly appreciate an explanation from both the Treasury and the Federal Reserve of the reasons the United States has continued to acquiesce in this misguided policy. Please contact Mr. Norman Singleton, my legislative director, if you require any further information regarding this request. Thank you for your cooperation in this matter. Ron Paul U.S. House of Representatives Dr. Ron Paul is a Republican member of Congress from Texas. Source:https://www.lewrockwell.com/1970/01/ron-paul/an-open-letter-from-congressman-ron-paul-to-treasury-secretary-oneill-and-federal-reserve-chairman-greenspan/ Are we to take this silence of the two offices as admission of guilt whereby wealth from our poor countries is suck by the stronger nations of the West? The use of gold as money is something which has been advocated for many years as the right diagnosis for the so called inflations and devaluations of currencies. However, when only one currency is redeemable in gold is this a fair arrangement? Nawakilisha

Thread starter Wickama
Start date Jul 3, 2015

Wickama

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Why are IMF members not allowed to use gold as currency for transaction?

Wickama

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