How do you solve a problem like Syria?

[muon2]

Privatize as much as I can get away with and establish a Gold Standard.

lol

Are you serious?  A country like Syria could have a gold standard for about 2 minutes max.

Before the US invades me it will probably take at least a month of media demonization of my regime so the people are on board.

Do you know what a gold standard is in regards to currency? 

Yes it means that money is actually backed up by something.

I don't think you do.  Explain why I would hold Syrian currency is there's a fixed exchange into gold.  Wouldn't this policy just result in Syria having no gold reserves, with no attendant benefits?

So...tell me if this is what you're envisioning: Syrian government comes out with a ratio for gold to Syrian dinar.  Syrians instantly run to the banks and trade in their dinars for gold, leading to the government lowering the gold to dinar rate, leading to rampant inflation, leading to more people turning in dinars for gold, leading to the rate lowering again, leading to more inflation, producing a situation where people are racing to get rid of their dinars before the government runs out of gold and their money is valueless.

That's basically the idea.  My hunch is also that there would be huge arbitrage opportunities because there is no global gold standard system.  I don't think it's at all possible for any nation to maintain a gold standard by themselves, much less a war-torn, chaotic Middle Eastern country.  You wouldn't be able to maintain a fixed-exchange rate to Gold at any particular rate and it's just a recipe for a run on the bank so to speak.

If a Middle Eastern country like Syria wanted to have a commodity-based standard, I would imagine they would peg the currency to a barrel of oil. The government would control their reserves and cash flow by changing production targets. A run by ordinary citizens would then seem unlikely.

[bedstuy]

Privatize as much as I can get away with and establish a Gold Standard.

lol

Are you serious?  A country like Syria could have a gold standard for about 2 minutes max.

Before the US invades me it will probably take at least a month of media demonization of my regime so the people are on board.

Do you know what a gold standard is in regards to currency? 

Yes it means that money is actually backed up by something.

I don't think you do.  Explain why I would hold Syrian currency is there's a fixed exchange into gold.  Wouldn't this policy just result in Syria having no gold reserves, with no attendant benefits?

So...tell me if this is what you're envisioning: Syrian government comes out with a ratio for gold to Syrian dinar.  Syrians instantly run to the banks and trade in their dinars for gold, leading to the government lowering the gold to dinar rate, leading to rampant inflation, leading to more people turning in dinars for gold, leading to the rate lowering again, leading to more inflation, producing a situation where people are racing to get rid of their dinars before the government runs out of gold and their money is valueless.

That's basically the idea.  My hunch is also that there would be huge arbitrage opportunities because there is no global gold standard system.  I don't think it's at all possible for any nation to maintain a gold standard by themselves, much less a war-torn, chaotic Middle Eastern country.  You wouldn't be able to maintain a fixed-exchange rate to Gold at any particular rate and it's just a recipe for a run on the bank so to speak.

If a Middle Eastern country like Syria wanted to have a commodity-based standard, I would imagine they would peg the currency to a barrel of oil. The government would control their reserves and cash flow by changing production targets. A run by ordinary citizens would then seem unlikely.

This is such a bizarre hypothetical, I feel sort of out of my depth.  But, wouldn't there be arbitrage opportunities for speculators in a fixed-exchange rate system?  After all, Syria doesn't control the global market price for a barrel of oil.  So, if at any point the exchange rate is out of whack between Syrian currency and oil, you would get murdered by speculation. 

[Chunk Yogurt for President!]

Why is everyone so confident that the government would have to inflate the gold standard?

[bedstuy]

Why is everyone so confident that the government would have to inflate the gold standard?

This is why I asked you if you knew what a gold standard is.  I don't think you know in any type of practical sense. 

[muon2]

Privatize as much as I can get away with and establish a Gold Standard.

lol

Are you serious?  A country like Syria could have a gold standard for about 2 minutes max.

Before the US invades me it will probably take at least a month of media demonization of my regime so the people are on board.

Do you know what a gold standard is in regards to currency? 

Yes it means that money is actually backed up by something.

I don't think you do.  Explain why I would hold Syrian currency is there's a fixed exchange into gold.  Wouldn't this policy just result in Syria having no gold reserves, with no attendant benefits?

So...tell me if this is what you're envisioning: Syrian government comes out with a ratio for gold to Syrian dinar.  Syrians instantly run to the banks and trade in their dinars for gold, leading to the government lowering the gold to dinar rate, leading to rampant inflation, leading to more people turning in dinars for gold, leading to the rate lowering again, leading to more inflation, producing a situation where people are racing to get rid of their dinars before the government runs out of gold and their money is valueless.

That's basically the idea.  My hunch is also that there would be huge arbitrage opportunities because there is no global gold standard system.  I don't think it's at all possible for any nation to maintain a gold standard by themselves, much less a war-torn, chaotic Middle Eastern country.  You wouldn't be able to maintain a fixed-exchange rate to Gold at any particular rate and it's just a recipe for a run on the bank so to speak.

If a Middle Eastern country like Syria wanted to have a commodity-based standard, I would imagine they would peg the currency to a barrel of oil. The government would control their reserves and cash flow by changing production targets. A run by ordinary citizens would then seem unlikely.

This is such a bizarre hypothetical, I feel sort of out of my depth.  But, wouldn't there be arbitrage opportunities for speculators in a fixed-exchange rate system?  After all, Syria doesn't control the global market price for a barrel of oil.  So, if at any point the exchange rate is out of whack between Syrian currency and oil, you would get murdered by speculation. 

I don't doubt there would be all sorts of ways to game the system. I'm just saying that from the leader's view the only commodity that wouldn't generate a "run" is oil. As for the exchange rate, there are many small sovereign nations that have hard pegs of their currency to either the dollar or euro and have no control over their foreign exchange rate. In fact several Middle Eastern countries peg to the dollar. This would be a hard peg to the price of a barrel of oil as a traded commodity rather than to the dollar as a traded commodity.