GOLD: Alchemy in Prices

As far as price goes, gold is a schizophrenic commodity. For individuals, it is worth what the law of supply and demand dictates: at last week's end about $160 per oz. But as part of the international monetary system, its worth is fixed by fiat at precisely $42.22 per oz. In effect, nations that have gold reserves are stuck with a frozen asset in their vaults. Because they must exchange gold among themselves only at the low ''official" price, they have been unwilling to use bullion even as collateral in arranging international loans.

At an international monetary meeting last week, the...

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