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The Eternal Allure of Gold

September 2011

Man’s fascination with gold spans millennia and continents. Deposited on earth by prehistoric meteor showers, gold has long been the quintessential form of commodity money. The earliest records of its use in international trade date back to 2000 BC. Croesus, king of Lydia, minted the first gold coin in 564 BC. The gold standard anchored global monetary policy and exchange rates from 1870 to 1914, and again, intermittently, during the interwar and postwar years. Gold’s role as the ultimate backing for international payments was only definitively ended in 1971, when the U.S. suspended the dollar’s convertibility into gold, terminating the Bretton Woods system.



 
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