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You need to re-read your history. European nations suspended the Gold Standard in 1914 due to the buildup related to WWI...but the U.S. did not. And we still ha

You need to re-read your history. European nations suspended the Gold Standard in 1914 due to the buildup related to WWI...but the U.S. did not. And we still had 100% inflation. In fact, the U.S. remained on the Gold Standard until 1933, and being on the gold standard did not prevent the Great Depression or decades of inflation. In fact, it played a large part in making it a "great" depression instead of just a regular downturn, and getting off the gold standard was what ended the Great Depression. Similarly, everything you've said about the Great Depression is completely wrong. It was caused by a stock market crash known as Black Tuesday, which was the result of rampant speculative trading on margin. After a series of relatively small dips, a number of investors faced margin calls and had to sell their shares. A few of them decided to liquidate all of their stock holdings, triggering a 12.8% drop in the Dow (Black Monday), which led to many more speculators panic-selling the next day (Black Tuesday).

WalterBright 4y ago
I recommend you read "Monetary History of the United States" by Friedman. I have. We've had stock market crashes before and after. None resulted in a Great Depression. Something else was going on to cause the Depression. The 100% inflation from 1914-1929 indeed was not prevented by the gold standard, but in 1929 people realized they could double their money by converting their dollars to gold. This caused the bank runs which did not stop until all gold exchanges were stopped. The gold standard ended in 1933, the Depression did not begin to end until 1939 when foreign countries flooded the US with armaments orders. What the US did in 1914 was called "pegging". It wasn't really a gold standard, the fiat money was just pegged to gold. Pegging has been tried over and over throughout history, a sham that tries to inflate money while pretending not to. It works for a while, and then always results in a massive and destructive correction. The US's correction was the Great Depression.
- gamblor956 4y ago
  I've read that book. My professor suggested using it as toilet paper after we were done, and I agreed with him. The Great Depression bank runs were not caused by people trying to swap their cash for gold. Because you couldn't...after 1913 banks generally did not maintain their reserves in gold, and they certainly did not maintain local reserves in gold. At best you could get a promissory note for a representative amount of gold. The fiction that you could actually swap out cash for gold is one of the more bizarre historical conspiracies. The bank runs stopped because the FDIC was created in 1934 to guarantee depositors' savings accounts. Until then, depositors risked losing their savings when a bank collapsed, which is why bank runs were a thing.
prottog 4y ago
> It was caused by a stock market crash known as Black Tuesday Mainstream economists contend that government intervention (the Smoot-Hawley Tariff Act) turned an ordinary recession into the Great Depression.

WalterBright 4y ago

I recommend you read "Monetary History of the United States" by Friedman. I have. We've had stock market crashes before and after. None resulted in a Great Depression. Something else was going on to cause the Depression. The 100% inflation from 1914-1929 indeed was not prevented by the gold standard, but in 1929 people realized they could double their money by converting their dollars to gold. This caused the bank runs which did not stop until all gold exchanges were stopped. The gold standard ended in 1933, the Depression did not begin to end until 1939 when foreign countries flooded the US with armaments orders. What the US did in 1914 was called "pegging". It wasn't really a gold standard, the fiat money was just pegged to gold. Pegging has been tried over and over throughout history, a sham that tries to inflate money while pretending not to. It works for a while, and then always results in a massive and destructive correction. The US's correction was the Great Depression.

gamblor956 4y ago
I've read that book. My professor suggested using it as toilet paper after we were done, and I agreed with him. The Great Depression bank runs were not caused by people trying to swap their cash for gold. Because you couldn't...after 1913 banks generally did not maintain their reserves in gold, and they certainly did not maintain local reserves in gold. At best you could get a promissory note for a representative amount of gold. The fiction that you could actually swap out cash for gold is one of the more bizarre historical conspiracies. The bank runs stopped because the FDIC was created in 1934 to guarantee depositors' savings accounts. Until then, depositors risked losing their savings when a bank collapsed, which is why bank runs were a thing.

prottog 4y ago

> It was caused by a stock market crash known as Black Tuesday Mainstream economists contend that government intervention (the Smoot-Hawley Tariff Act) turned an ordinary recession into the Great Depression.