[EMAIL PROTECTED] wrote:
>
> >> "When they created the Euro, the Europeans decided to maintain an
> >> official Gold reserve at 15% of their total reserves to back up their
> >> currency."
> >
> >Here's what I find interesting about this: If the price of gold goes up,
> >then doesn't this mean that the currency issuer can inflate his currency
> >more, since the value of his gold-reserve rises? Doesn't this subsequent
> >inflation cause the price of gold to go even higher?
> >
> >So, even though the currency is backed by gold, it has no real effect,
> >right?
> >
> >Craig
>
> I *guess* what they mean is:
>
> one euro is backed by, say "half a percent" reserves.
>
> OF THOSE RESERVES, 15% is gold?
>
> maybe??
>
> Claude is investigating!
The question in my mind is what does the ECB mean when they use
the word "backed". Does that mean that somebody can exchange
upon demand a Euro for 15% gold and 85% non-Euro currency or
85% something else? If not, then I don't understand the 15%
backing point.
Bob
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