If Gold Prices Are The Same Everywhere, Then Why Arn't House Prices Essay

If Gold Prices Are The Same Everywhere, Then Why Arn't House Prices - Essay Example Using the basic economic supply and demand curve, it is easier for us to examine how prices and available supply affects the existing market behavior. To enable us to understand the major factor that make the prices of gold remains the same over time but not the housing prices, the history of the global trading system will first be tackled. Using the theories of microeconomics, significant changes within the domestic markets that contributes to the changes in the market value of houses will be thoroughly discussed. Between the years 1879 to 1934, trading of goods between two countries occurred using of the gold standard which enabled traders to pay goods and services in exchange with the quantity of gold (McConnell & Brue, 2004: p. 478). Since the value of gold remains the same in each country, there was officially a fixed exchange rate all over the world. Eventually, the use of fixed exchange rate resulted to a negative international demand shock since the prices goods from one country to another remains the same (Eichengreen, 1996). The global economic depression that happened back in 1930s changes the concept of having fixed exchange rate. (McConnell & Brue, 2004: p. 479) In order to promote free competition within the domestic and global trading markets, some nations have considered making the cost of exportation cheaper by devaluating their currency against the real value of gold. As part of strengthening the adjustable-peg system which was introduced under the Bretton Woods System1, each country agreed to accept gold and the US dollar as the benchmark for international reserves since the US was able to accumulate the biggest supply of gold as compared with other countries (McConnell & Brue, 2004: p. 480). As a result, the agreed equivalent of gold in terms of the US dollar is US$35 per ounce (Bougrine & Seccareccia, 2004). Aiming to avoid economic bias

Speech article 2 Essay Example | Topics and Well Written Essays - 750 words

Speech article 2 - Essay Example In the speech, Taiwan’s president, Ma expresses his firm support for the pro-democracy movement in Hong Kong and the need for reforms to let Hong Kong go democratic. Nearly a month ago, Hong Kong residents led by Hong Kong Federation of Students went to the street to protest the National People’s Congress decision on proposed reforms, which denied civil nominations. The movement termed Occupy Central demand the liberty to elect the next local head of their government. The movement calls for a democratic and direct chance to elect the Chief Executive of Hong Kong without Beijing’s interference. Ma states that China should take the recent occurrences as an opportunity rather than a problem and facilitate a democratic transition in Hong Kong. Further, he also advised China that as a step towards achieving constitutional democracy, the country should start by letting Hong Kong go democratic. In addition, Ma suggests that with the rapidly developing economy, China is becoming a more prosperous society, and consequently, the number of wealthy people is increasing. As the wealth increases people tend to desire a more affluent lifestyle, as well as greater rule of law and more democracy. Therefore, for China, it seems there is no way out, but to give Hong Kong autonomy because eventually, the heat will be too much to bear and they will give in to the demands. Moreover, Ma clarifies that contrary to the popular belief, the need for democracy is not a strategy of the Western countries: he says, â€Å"Such a desire has never been a monopoly of the West, but it is the right of all humankind† (Ying-jeou 1). Such sentiments from the president of Taiwan in favor of freedom are very relevant to the current situation because the state is also ethically Chinese as Hong Kong. Though Taiwan has been under self-rule since 1940s, the mainland China still claims sovereignty over it and vows to take control over it one day even if it means by force. Moreover, Taiwan was