A peg works when a central bank has enough of the foreign currency that they can credibly offer to exchange to and from the local currency at a fixed ratio. Since the US Dollar is a huge major reserve currency around the world, most foreign central banks, particularly in countries that export to us, are able to do this, if they choose to.
Why they would want to do so is a more difficult question.
can you clarify on the "enough" part? how much?
Post
Topic
BoardTrading Discussion
Re: Should there be a fee when placing bids\asks on mtgox?
by
chame
on 21/05/2011, 04:45:22 UTC
How do other world systems work with bid and ask spreads? ie stocks, currency spreads on world markets? Are there fees involved?
Post
Topic
BoardEconomics
currency peg (ala Saudi riyal)
by
chame
on 21/05/2011, 04:40:55 UTC
how does currency pegging work? how can this even work?
Saudi arabia and the UNited States are worlds apart. Does this work because of the dependance on their oil?
Post
Topic
BoardBitcoin Discussion
Re: HOWTO: Anonymous Server Acquisition and Operation
by
chame
on 21/05/2011, 02:55:12 UTC
> 1) buy some bitcoins using USD via regular channels (these bitcoins are linked to your identity)
mine for a few weeks and get 50 virgin coins.. would buy a few months hosting..