Let's say we have these numbers:
Total amount of grain: 7,800 tons
Total amount of gold (regardless of the number of references): 2,000 oz.
Number of references for grain or gold: whatever number we say.
Let's use these numbers to start:
Number of grain references: 6
Number of gold references: 1
Total value of both grain & gold = 14,000 oz. gold.
Total grain tonnage per grain reference: 7,800/6 = 1,300 tons
Total value of grain in gold per ton:
1,300 tons = 2,000 oz. of gold.
We do NOT divide the total grain into the total gold.
Now, IF we add another gold reference, WE DO NOT increase the total amount of the gold.
IF we add another grain reference, we DO increase the total amount of gold.
That is because gold is the standard.
1 more grain reference would create an additional value of 2,000 gold oz, but would not in fact create any more gold in the world. Moreover, a 7th grain reference would reduce the total amount of tonnage per reference.
7 grain references, not 6, would mean:
7,800 tons of grain/7 references = 1,114 tons per references.
Which in turn would mean,
1,114 tons = 2,000 oz. of gold.
On the other hand, IF we add that second gold reference, then:
Each gold reference = 1,000 oz. of gold.
Each grain reference would then equal 1,000 oz. of gold.
The more gold references you add, the more the whole system declines in price.
More gold references means that the gold is more widespread, or 'moves faster' in the system, so despite the actual total amount of gold NOT increasing, the total value of all other commodities apart from gold DROPS in value.
Let's go with the new numbers:
Number of grain references: 7
Number of gold references: 2 (*sorry about the typo)
Total amount of grain and gold has NOT changed. Total gold is still 2,000 oz. Total grain is still 7,800 tons.
NEW total value of both grain & gold: nine references multiplied against the total amount of oz. of gold per gold reference:
9,000 oz. gold.
Let me be as clear as possible:
The value of 7 references of grain (regardless of the actual tonnage of grain produced) equals:
The total amount of gold produced divided by the number of gold references multiplied by 7 = 7,000 oz. gold.
The other 2 gold references are then equal to 2,000 additional oz. of gold, the actual gold in existence.
I know it sounds strange and weird to twist the value of gold versus other things in this way, but BELIEVE me, where it comes to making the system work, it is freaking brilliant. The backwards perspective of "more gold references makes everything cheaper" took a long, long time to hit on - but when viewed from the perspective of tens of thousands of references, where only a few hundred are gold, it really works. Remember for the future, keep control of your gold references! Don't add dozens of them. It will only wreck your economy. I recommend that only 1-3% of your total references be actual gold.