Article says: "Many economists put at least part of the blame for the severity of the Depression on the strictures of the gold standard, as countries clung to

Article says: "Many economists put at least part of the blame for the severity of the Depression on the strictures of the gold standard, as countries clung to gold and put off stimulus." Many economists disagree, for example George Robinson who wrote "Monetary Mischief" in 1935. I'll summarize his arguments. First: the gold standard was not overly restrictive. People routinely did business in gold contracts, and there was plenty of liquidity. It is false to think that you must have "enough" money to equal the total amount of economic activity in any given group of people. Money is traded at the margin, e.g. if I pay you a dollar, and you pay someone else that dollar, we just did two dollars worth of business with only one dollar. Second: "Stimulus" is what caused the problem in the first place. The Fed's policies enabled the monetization of the WWI Liberty bonds, and the monetization of common stocks, which led to rampant speculation and malinvestment. When the policies were finally removed, and they had to be removed eventually, the economy shriveled and suffered from its malinvestment (in stocks such as GE and Consolidated Gas, in Florida real estate, etc.) More stimulus is not the answer to a problem caused by too much stimulus. That's like prescribing a heroin injection as a treatment for heroin withdrawal. It "works" in a sense, but postpones solving the actual problem. Third: the U.S. economy suffered a monumental crash in 1921, but that was not followed by a prolonged depression. That's because the people were allowed to suffer and sort out the consequences of their previous malinvestement and put their future affairs on a more solid footing, without relying on that next heroin injection so to speak. A quote from that 1935 book: "Our present difficulties sure did not arise from any scarcity or failure of gold, but, to the extent that they had monetary origin, sprang from monetizing property through the banking process at a very high price level, which had later to be demonetized at a much lower price level. We tried to make gold too efficient. In this we undertook a form of managed currency. The Federal Reserve system had an opportunity to restrict the money supply, but did not understand the matter, and failed completely." Another interesting quote: "Now of course it was all done in the name of necessity, as such things usually are. In his radio address on the subject the President said that there was not enough gold in the world to satisfy all the contracts made in its name, quite as if gold were only a medium of exchange and payment, and our only medium at that, and not at all our standard or measure of value."