ABSTRACT

More than fifty years after the world left the gold standard, monetary theory has not yet succeeded in developing a generally accepted explanation of money and its functioning in our society, the value and ‘image’ of world currencies and the factors influencing their price relations, to say nothing of monetary reform, the role of gold in Central Bank Reserves and the conceptual jungle of the so-called need for international liquidity. Four hundred years of metallic currencies, and, in due course, of a purely quantitative approach to the problems of the value of money have left their mark on all theoretical efforts to explain the working of the monetary system both within the national economies and on the international level; even today many authors rely on the metallic or quasi-metallic character of money tokens and/or their quantity and velocity of circulation to explain the value of all other forms of visible and invisible money which have outdone the remaining coins and notes by more than 3:1 in most industrial countries.