Backed Money, Fiat Money,
When the bank pays out four one-pound notes for an ounce of gold that it reissues as coins worth 3 l. 17 s. 10 1/2 d., (about 3.9 pounds) then customers will eagerly bring one ounce of gold to the bank to exchange for 4 pound notes. They will then return 3.9 of those notes to the bank in exchange for coins containing one full ounce. ................
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