bullion

[Dharmadeva]

Floating [of currency value] is not inherently stable, and currency should
be based on bullion. Bullion and gold are not necessarily
the same thing - although my dictionary defines it as 'gold and
silver before manufacture'.

It seems to me that unless currency notes are linked in some way to
something tangible there are risks of inflation and depression - Ba'ba'
refers to irresponsible politicians/reserve bank printing notes
indiscriminately in the quote below. At the same time
I can't quite see why it should be necessary to link them to 'bullion',
although it may depend on what that term actually means.

If 'bullion' does mean 'gold', it would seem to make things too easy for
countries that can produce gold indigenously but may not produce much else ,
and disadvantageous to countries that may be rich in other natural resources
instead. What about countries or economic zones that have few natural
resources but can still manage to produce items of necessity that need money
to help them circulate? Why should they have to barter what they can
produce for gold reserves, which is fodder for neither man nor beast, if
that is what bullion is? Perhaps we come back to the topic of 'wealth' -
and the relationship of that to the supply of bank notes.

"...in the banking system political administrators who have no
financial consciousness should not be allowed to print monetary notes
indiscriminately without reserving the proportionate amount of
bullion in their treasuries. If the proportionate amounts of bullion
are not reserved, the entire society will be affected. It leads to
large scale inflation, which in turn jeopardises internal trade and
commerce as well as foriegn trade and barter."
(Keep the money rolling, 21/12/86 Calcutta)

"The printing and issuing of monetary notes having no bullion value
must stop immediately and new notes having bullion value should be
issued in new colours and shapes. No monetary notes should be issued
by the government henceforth without a clear assurance that it is
prepared to pay the requisite amount of money in gold coins. This
can only be implemented by a Proutistic government."
(Economic Dynamics, 13/9/87 Calcutta)