In addition to all of these tax issues, the U.S. in the early 1930s was on a gold standard where paper currency was legally convertible into gold.
WSJ: Arthur B. Laffer: Taxes, Depression, and Our Current Troubles
The recent paper losses on gold are unlikely to have a big impact on the universities.
Desperate for cash, he sells gold in order to load up on paper.
This was then placed in a pencil and used to scribble on paper imprinted with broken gold stripes.
Because it is impossible to manufacture and traditionally difficult to extract and process from the ground, gold served as a stable peg for coinage and paper money issuance--but no nation operates on a "gold standard" today, as most abandoned it during the 20th century after major powers suspended it periodically during times of costly military adventures during the 19th century.
Some of the more pessimistic commentators see the recent credit excesses as the inevitable consequence of a system based on paper money and call for the return of the gold standard to prevent future crises.
Looking at the massive credit bubbles, including that in China, it seems clear that the price is being manipulated lower on gold and I would guess that the same entities doing the paper manipulation are buying the physical with the other hand.
FORBES: Gold Prices Up 11% Since Market Collapse On Physical Demand, But Bullishness Is Lacking
The increase in the demand for paper currency and gold not only had a quantity effect on the money supply but it also put upward pressure on the price of gold, which meant that dollar prices of all goods and services had to fall for the relative price of gold to rise.
WSJ: Arthur B. Laffer: Taxes, Depression, and Our Current Troubles
Until 1968, only the federal government could own uranium in the U.S. Although investors still cannot physically possess uranium and there is no formal exchange for the metal, as there is for gold, oil and copper, they can legally own it, if only on paper.
However, euros are paper and to increase the gold supply you have to go to much greater lengths than switch on a printing press.
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