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as far as i can tell (correct me if im wrong) Farmers had massive loans that were gold denominated. (dollar backed by gold). The currency was deflationary, and
by ffggvv 5y ago
as far as i can tell (correct me if im wrong)
Farmers had massive loans that were gold denominated. (dollar backed by gold). The currency was deflationary, and the massive debts were breaking the back of farmers/rural areas.
Adding silver as backing of dollar essentially increases supply of the backing of the currency, creating inflation. which relieves the farmers debts. (pay back less real money)
so the farmers and WJB basically just wanted inflation to relieve their debt load. (and silver interests also obviously backed the idea)
- cratermoon 5y agoI get it now, thanks to you and another reply. I was never taught the economic technical details, just the socio-political history.
- nickik 5y agoThis is mostly correct. I added some context in my answer that you might be interested in. I think it would be more correct to say that adding silver would mostly cause increase liquidity it unlikely silver would have caused significant inflation. In general I would argue the issue with silver was way overblown, if silver or not would not have changed the fundamental problem. The people who opposed silver predicted over the top results and those who were pro silver overestimated the actual effect it would have. The US monetary system had far more important issues related to unit banking, reserve pyramids and note issue.