Quote Originally Posted by Hanna View Post
However if gold was the commonly held reserve and US dollar just a normal currency, then these problems might not exist!
Suppose you're right. So, I think if a golden dinar becomes the currency for oil transactions it would create the exact same problems and cause LOT of other problems and wars in the world. You see, when you hear the unintelligent slogan that "the golden currency favours no country" - that needs additional explanation. Say, you have a golden dinar, what country would produce it? All countries? How? At what exchange rate? According to the price of raw gold at that time? But the price of raw gold would skyrocket as a result of that process, wouldn't it? Then how? At the price of oil at that point? Could you imaging what the "futures" contracts might look like if that happens? So, I'm not sure you thought that through.

The switch to the golden currency worldwide would favour those who save and not those who spend effectively slowing down the world economy. Think about that when you have a chance. The British Empire used golden currency as long as they had their colonies: the colonies produced and the Britain consumed at the unfair price (they only produced the coins, nothing more significant), and that was just the means to control the producing colonies. And that's why the colonies rushed into the independence and created their own national currencies.

The golden dinar (if created) would be a very strong way for the resource-exporting countries to control the goods-producing countries. Could you even imagine the scale of the military conflicts that situation would cause?!