I bet some
of you have already known about the Golden Age. Don’t worry if you haven’t
known about it, yet cause I will explain it to you. But, let’s play guessing
game first. Start with the meaning of “Golden”. What do you think is the
meaning of golden as it written on the title? Is it about the age when the
people lived in prosperity? Or maybe it literally means golden? Actually, both
are right.
This time, I
am going to explain the second one only. The Golden Age lasted for 18 years
before its collapse in 1920s. Gold was used for the transactions. Even it was
not only gold which was used in the golden age (silver was also used in that
time), gold is still the main idea of it.
There was a
system called gold standard. According to http://www.investopedia.com/terms/g/goldstandard.asp, the gold
standard is a regulation about the fixed gold amounts. With this regulation,
the exchange rate between two currencies will have the same value. Fixed amount
means the gold’s value has already been fixed and it has the same value in
every country. For example, if you change a gold into a dollar, it will cost
$20. It also valid for vice versa. The gold standard was used from 1875 to
1914, also during the interwar years (1919-1938).
We all know
that we’re not using gold anymore for transaction. The gold is only used for jewelry
and such of that. We are now using money, I mean banknote. How could it be
collapsed? Despite its advantage on the inflation case, gold is very expensive
for transaction. The value of goods and the gold is not the same anymore. The
value of gold is increasing each day while the
goods’ is decreasing. Then, we have to find a material which is cheaper
than gold. That’s why we use paper nowadays as our brand new basic material of
money for our daily transactions.
The
conclusion is we are now vulnerable to inflation. The exchange rate between
currencies is not the same anymore. World economy is now held by US, that’s why
every currencies have to compare their exchange rates to dollar. Even Europe,
the old leader of world economy, has to accept the impact. World economy become
unstable and unpredictable.
This is the
end of my explanation. I hope it could help you to understand more about the
golden age. It’s nice to help people while I’m doing my assignment. JJJ
Athilla
Meidictine Johanita
1701350235
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