Currently I am reading a very good book about the gold investment and goldstandard ("Freiheit durch Gold" for every german reader). I've always been a very big supporter for the 100% goldstandard but as I am reading this book there's one big flaw that comes to my mind.
Image if we would establishe the goldstandard. Gold and Silver prices would rise to the rooftop etc. all the stuff we know.
But wouldn't this system contribute just another manipulation possibility?
So if we would have an established gold standard the smartest thing to do would be to buy as much gold as you can. You buy it and keep it. During the time the goldprice would rise even more because of the shortage of gold.
And at some point you could sell all your goldreserves for a much higher price. So then the price would drop significantly. You could do this over and over again. Wouldn't this ruin the free market ?
It's just an idea. I hope you can proof me wrong.
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