Re: Incomes and Exchange rates; part 2

["Maria Laura Segura" <msegur@xxxxxxxx>]

John wrote:
> My own position is that gold [or any other commodity backing] is
> superfluous to government taxation to establish value for money and
> it is the quantity of value that is the sole relevant function of
> monetary policy.
>


John,
If I understood you well, you're saying only taxation incomes
are sufficient to establish value for money.  That might be the case
in the US, but in some countries where people don't trust there own's
government ability to spend, some external insurance is necessary. In
these cases the backing works as a control measure and restrains the
government from excessive spending (which in most of the cases is
financed through monetary emition and leads to high inflation rates)


Laura