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I'm always confused at how there's such a seemingly large mismatch between on one hand people trivially dismissing the gold standard as a joke and on the other

I'm always confused at how there's such a seemingly large mismatch between on one hand people trivially dismissing the gold standard as a joke and on the other the fact that the gold standard seemingly worked well enough for this country for hundreds of years. It was the system that powered the country over the majority of its history, for the vast majority of its expansion and rise to power. But it's so obviously a joke of a system?

deleted 4y ago
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generj 4y ago
It didn’t work well at all. We had frequent economic panics all through the 1800s and early 1900s. When the US rose to power (1930s to 1940s) gold was mostly not used in practice due to international traffic being mostly blocked (due to nationalist impulses during the Depression) or under heavy credit (during WW2). There’s a decent argument to be made gold caused the Great Depression or at least exacerbated it. The “gold standard” system that started under Breton Woods (1944-1971) was basically a polite fiction, and when someone called the fiction it died. A gold standard would be totally unworkable for today’s trade. It barely served the fledgling globalism of the 1920s.
7speter 4y ago
>worked well enough for this country for hundreds of years. If I remember my numbers from an economics course right, from 1776-1912, there were major runs on banks in the US an average of every 12 years. While the US didn't leave the gold standard until 1933, the fed, after it learned not to drastically raise interest rates quickly in 1929, has kept things pretty stable for almost a century.
imtringued 4y ago
There was deflation pre WW1, then there was hyperinflation in Germany leading to Hitler's failed coup, finally there was deflation once again and Hitler got to power. These constant economic cycles just drive fear and populism and if people are desperate they also become more receptive of fascism. The way currencies are designed forces their inevitable collapse so why not keep the party going for as long as possible ala Keynes? You don't lose anything from building a better society and then resetting the money system Vs not doing anything and then resetting it.

deleted 4y ago

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generj 4y ago

It didn’t work well at all. We had frequent economic panics all through the 1800s and early 1900s. When the US rose to power (1930s to 1940s) gold was mostly not used in practice due to international traffic being mostly blocked (due to nationalist impulses during the Depression) or under heavy credit (during WW2). There’s a decent argument to be made gold caused the Great Depression or at least exacerbated it. The “gold standard” system that started under Breton Woods (1944-1971) was basically a polite fiction, and when someone called the fiction it died. A gold standard would be totally unworkable for today’s trade. It barely served the fledgling globalism of the 1920s.

7speter 4y ago

>worked well enough for this country for hundreds of years. If I remember my numbers from an economics course right, from 1776-1912, there were major runs on banks in the US an average of every 12 years. While the US didn't leave the gold standard until 1933, the fed, after it learned not to drastically raise interest rates quickly in 1929, has kept things pretty stable for almost a century.

imtringued 4y ago

There was deflation pre WW1, then there was hyperinflation in Germany leading to Hitler's failed coup, finally there was deflation once again and Hitler got to power. These constant economic cycles just drive fear and populism and if people are desperate they also become more receptive of fascism. The way currencies are designed forces their inevitable collapse so why not keep the party going for as long as possible ala Keynes? You don't lose anything from building a better society and then resetting the money system Vs not doing anything and then resetting it.