Abstract

On the Debate concerning Olympic Gold Coins

President Nixon’s spectacular decision to suspend gold redemption of the dollar indefinitely has brought the hitherto much too slow “demonetization of gold”, i.e. the freeing of the international monetary system from its intolerable dependence on gold speculation, a good step forward; at last we have a clear renunciation of the “gold illusion” that is still widespread even in some central bank circles and whose proponentsfeel justified in regarding the yellow metal as a stable alternative to all other means of payment and stores of value for international payments. The German Bundesbank had a similar opportunity a year ago when the bill was introduced concerning the minting of gold alloy Olympic coins for DM 100. Nothing could have disavowed the gold illusion more effectively than the authorization of gold alloy - in addition to the already issued silver alloy - Olympic coins, which without question would have been totally absorbed, like the former, by demand from coin collectors at home and abroad; apart from a corresponding neutralization of money, it would have made possible a painless financing of the deficit on the 1972 Olympic Games, which must now be effected all the more painfully from tax revenue. The objections of the Bundesbank to this unconventional financing of the 1972 Olympics were more of a formal and juristic nature; the central bank saw a danger to its note-issuing monopoly in the envisaged extension of state coinage prerogatives to coins “the face values of which invade the orders of magnitude reserved for notes”. Objections of this and a similar nature wasted the irretrievable opportunity of delivering a further powerful blow at that international source of trouble, gold speculation, and the underlying gold illusion on the occasion of a quite unique financing task, i.e. one that recurs only once every thirty years, which could not have set any precedent for other purposes