What are the advantages of Commodity Money?

Discussion in 'Commodities, Stocks, and Indices' started by richard branson, Dec 14, 2012.

  1. richard branson

    richard branson Banned

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    The most important advantage of commodity money is basically that it serves an additional purpose. For example, gold can be turned into jewelry, while cigarettes can be smoked. This gives the holder added options; he can either use or spend the money. This can also be seen as a disadvantage. If cigarettes become an informal currency in prison, for example, smoking a cigarette can become a costly activity.
    Another advantage of this type of money for some people is that it may be possible to acquire money that wasn't previously in circulation. For example, if gold is used as commodity money and somebody discovers more of this metal, he or she may be able to get more value from its role as money than from its role as a base for jewelry.
     
  2. MrThind

    MrThind Trader

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    thanks for this information it's good for me
     
  3. richardgere

    richardgere Trader

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    Hello,

    One of the best advantages of commodity money is that it serves for an additional purpose and it is quite possible to acquire money that was not in the previous circulation.
     

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