4 ms·

The government didn't have the ability to print an indefinite amount of money at that time.

fullshark 5y ago
Yeah I'll keep putting my savings into the thing the Gov't will do whatever it can to keep going up >+10% every year as there is no alternative (TINA).
dragontamer 5y ago
I'm pretty sure the President at that time made the ownership of gold illegal and then decoupled the dollar from gold on executive action alone. Well, not Hoover. The next President. The power was always there: the will to wield the power was not there until Roosevelt.
- chrisco255 5y ago
  Roosevelt confiscated gold held in banks (in exchange for dollars) and subsequently diluted the dollar, but it was still pegged to gold. Nixon closed the gold window and as a result created the fiat monetary experiment we have today, in 1971.
  - dragontamer 5y ago
    > Roosevelt confiscated gold held in banks (in exchange for dollars) and subsequently diluted the dollar, but it was still pegged to gold. I mean, legally pegged to gold was meaningless since holding just 2-kg of gold was illegal IIRC. EDIT: Just reread the executive order: 5-oz was the cutoff point. IMO, Nixon's actions just "admitted" that the price of gold was no longer pegged to the dollar. But making gold "hoarding" illegal was really the pragmatic step that decoupled gold from the dollar. The (black) market price of gold vs dollar went haywire after Roosevelt's executive order. And in many respects: the market price (even black-market prices) are more important than what the law actually states.
  - leereeves 5y ago
    > Roosevelt confiscated gold held in banks Not just the gold held in banks. Roosevelt made it illegal for American citizens to own more than a trivial amount of gold (with a few exceptions like jewelers and coin collectors). Afterwards, as you said, dollars could be redeemed for gold at the new price, but only by foreigners.
    - chrisco255 5y ago
      Yes, but he didn't send federal agents around to people's houses to confiscate any gold they might have. Prior to that executive order, presumably, most Americans kept their gold in bank deposit boxes. In my opinion that executive order should have been overturned as unconstitutional. But Roosevelt owned the courts.
  - ineedasername 5y ago
    It doesn't really matter if currency is pegged to the price of gold when the government determines what that price is.
kjaftaedi 5y ago
Do you remember the internet in 2008? Literally every other advertisement was some type of animated gif trying to get people to refinance their mortgage. We're talking mostly Facebook style ads, done in an MS Paint / meme style to appeal to the lowest common denominator of home owners. It was basically the same thing in a different format.
ineedasername 5y ago
Not quite: Yes, there was the Gold Standard. But the government set the price of gold. Meaning the government still controlled the amount of money, because they controlled the price of gold.
georgeecollins 5y ago
.. and hence there was deflation, one of the main drivers of the Great Depression.

Yeah I'll keep putting my savings into the thing the Gov't will do whatever it can to keep going up >+10% every year as there is no alternative (TINA).

dragontamer 5y ago

I'm pretty sure the President at that time made the ownership of gold illegal and then decoupled the dollar from gold on executive action alone. Well, not Hoover. The next President. The power was always there: the will to wield the power was not there until Roosevelt.

chrisco255 5y ago
Roosevelt confiscated gold held in banks (in exchange for dollars) and subsequently diluted the dollar, but it was still pegged to gold. Nixon closed the gold window and as a result created the fiat monetary experiment we have today, in 1971.
- dragontamer 5y ago
  > Roosevelt confiscated gold held in banks (in exchange for dollars) and subsequently diluted the dollar, but it was still pegged to gold. I mean, legally pegged to gold was meaningless since holding just 2-kg of gold was illegal IIRC. EDIT: Just reread the executive order: 5-oz was the cutoff point. IMO, Nixon's actions just "admitted" that the price of gold was no longer pegged to the dollar. But making gold "hoarding" illegal was really the pragmatic step that decoupled gold from the dollar. The (black) market price of gold vs dollar went haywire after Roosevelt's executive order. And in many respects: the market price (even black-market prices) are more important than what the law actually states.
- leereeves 5y ago
  > Roosevelt confiscated gold held in banks Not just the gold held in banks. Roosevelt made it illegal for American citizens to own more than a trivial amount of gold (with a few exceptions like jewelers and coin collectors). Afterwards, as you said, dollars could be redeemed for gold at the new price, but only by foreigners.
  - chrisco255 5y ago
    Yes, but he didn't send federal agents around to people's houses to confiscate any gold they might have. Prior to that executive order, presumably, most Americans kept their gold in bank deposit boxes. In my opinion that executive order should have been overturned as unconstitutional. But Roosevelt owned the courts.
- ineedasername 5y ago
  It doesn't really matter if currency is pegged to the price of gold when the government determines what that price is.

kjaftaedi 5y ago

Do you remember the internet in 2008? Literally every other advertisement was some type of animated gif trying to get people to refinance their mortgage. We're talking mostly Facebook style ads, done in an MS Paint / meme style to appeal to the lowest common denominator of home owners. It was basically the same thing in a different format.

ineedasername 5y ago

Not quite: Yes, there was the Gold Standard. But the government set the price of gold. Meaning the government still controlled the amount of money, because they controlled the price of gold.

georgeecollins 5y ago

.. and hence there was deflation, one of the main drivers of the Great Depression.