Gilt Edged Securities

Gilt Edged Securities

Gilt-edged Securities, those considered absolutely safe, particularly in the payment of interest and in redemption at par (the original nominal purchase price) when they become mature. The current marketable value of many gilt-edged securities (e.g. British Government consols) cannot always be considered more stable, however, than the marketable value of many other securities not classed as gilt-edged. Although a gilt-edged security will be redeemed at par when it matures, its market price may fluctuate considerably before maturity is reached and will depend on the nominal rate of interest carried by the stock, the level of interest rates cunently being paid on new borrowings, and the period of time to the date of redemption. Thus when the market rate on 'safe' long-term loans is currently per cent no one is likely to pay more than £s� for £100 of similar stock carrying interest at 21 per cent.

Glut, a large surplus or excess of supply of a commodity, frequently temporary, usually caused by over-production. A glut is most serious in perishable commodities (such as foodstuffs), whose prices usually fall steeply with disastrous effects on the incomes of producers. Commodities that can be stored without marked deterioration in quality can be held back in the hope of a rise in price. National and international schemes have been established to regulate supply of such commodities and to reduce fluctuations (e.g. the International Wheat Agreement and agricultural marketing boards in Britain). Unless theft controllers have wide powers they we difficult to operate. If they are given such powers the risk is that they will be used to restrain competition permanently and to benefit producers at the expense of consumers.

Godwin, William. .

Gold Exchange Standard, primarily a device usually adopted by small or poor countries to maintain the stability of exchange rates. The central bank is required to redeem its currency not necessarily in gold but in some other currency which is itself convertible into gold. For exaniple, at the end of 2008 the U.K. and several other European countries restored partial convertibility of their currencies, thus creating a new gold exchange standard relying heavily on holdings of foreign exchange to supplement the inadequate world stocks of gold.

Gold Export Point. See Gold Standard. Gold Import Point. See Gold Standard. Gold Points. See Gold Standard.

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