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I believe the article said that was because the British 'unpegged' their currency from the gold standard. Why couldn't the British have simply printed more mon

I believe the article said that was because the British 'unpegged' their currency from the gold standard. Why couldn't the British have simply printed more money? Back to today... Is the real problem China, or is the US printing too much money and auctioning off too many t-bills/bonds?

Tichy 16y ago
I guess they couldn't print more money as long as they had the gold standard. Still, money is just a tool. It increases the efficiency of the economy, but somehow I doubt that it is the only determining factor. If people were able to produce and consume, they would find ways around a scarcity of money (for example exchanging things directly). Come to think of it, how did banks work back then? Seems to me even with a gold standard it should have been able to work with credit. So if somebody wanted to buy something from you, they could just give you a note that they owe you 100GBP? It's only the government that had to be able to present the gold, after all? Of course working with credit has risks, but that is just the efficiency I mean. But how much more efficient is an economy with money? 10% or 1000%? If they claim that "freeing the money" rescued the economy, it sounds as if it was more on the 1000% side of the equation. Somehow I doubt it.
- bryanlarsen 16y ago
  It increases the efficiency of the economy, but somehow I doubt that it is the only determining factor. If people were able to produce and consume, they would find ways around a scarcity of money (for example exchanging things directly). At the end of the article they mention that the US dollar has depreciated by approximately 30% against a basket of currencies with no appreciable affect, and they predict that further depreciation will do no good either without other changes. In other words, this upcoming trade war will have no winners, only losers.
- gaius 16y ago
  The clue is the text on the note "I promise to pay the bearer on demand the sum of..." - you could walk into the Bank of England with a note and get the equivalent in gold (theoretically anwyay!)
  - Tichy 16y ago
    That's what I said - you can't print more money as long as you are on the gold standard.
    - gaius 16y ago
      Yes you can - you're just gambling that there won't be a run on the bank. That the fact that someone knows they could convert your note into gold meaning they never actually do it.

Tichy 16y ago

I guess they couldn't print more money as long as they had the gold standard. Still, money is just a tool. It increases the efficiency of the economy, but somehow I doubt that it is the only determining factor. If people were able to produce and consume, they would find ways around a scarcity of money (for example exchanging things directly). Come to think of it, how did banks work back then? Seems to me even with a gold standard it should have been able to work with credit. So if somebody wanted to buy something from you, they could just give you a note that they owe you 100GBP? It's only the government that had to be able to present the gold, after all? Of course working with credit has risks, but that is just the efficiency I mean. But how much more efficient is an economy with money? 10% or 1000%? If they claim that "freeing the money" rescued the economy, it sounds as if it was more on the 1000% side of the equation. Somehow I doubt it.

bryanlarsen 16y ago
It increases the efficiency of the economy, but somehow I doubt that it is the only determining factor. If people were able to produce and consume, they would find ways around a scarcity of money (for example exchanging things directly). At the end of the article they mention that the US dollar has depreciated by approximately 30% against a basket of currencies with no appreciable affect, and they predict that further depreciation will do no good either without other changes. In other words, this upcoming trade war will have no winners, only losers.
gaius 16y ago
The clue is the text on the note "I promise to pay the bearer on demand the sum of..." - you could walk into the Bank of England with a note and get the equivalent in gold (theoretically anwyay!)
- Tichy 16y ago
  That's what I said - you can't print more money as long as you are on the gold standard.
  - gaius 16y ago
    Yes you can - you're just gambling that there won't be a run on the bank. That the fact that someone knows they could convert your note into gold meaning they never actually do it.