How the Gold Standard Contributed to the Great Depression

[Iriemon]

Makes sense. But how can the suddenly fiscally concerned Republicans score political victory if they don't slam everything Obama does as being wasteful and unnecessary?

Yeah, I know its more than a little ironic given how enthusiastically the Republicans supported Bush and the GOP Congress who ran budget deficits when the economy was fine.

However, its important that there is a legislative check on the Democrats so they can't do anything they want. The Republicans may be incompetent, but there is little evidence that the Democrats are much better.

I wouldn't bet against you. I'm hoping Obama will take steps to balance the budget after this crisis is past. But I'm not very optimistic.

 

[xsited1]

Isn't it great that Americans work all week to earn paper money that the US Government, through central banks, can simply create with no work at all? That's super!

That is CERTAINLY the problem of NOT having a gold standard.

Odd, that you cannot see the problem of HAVING one though.

Conservatives like to accuse liberals of seeing the economic pie as static, and claim that we see the economy game as ZERO sum game.

But the GOLD stardard INSURES that economic becomes a ZERO sum game, doesn't it?

I've been over this so many times on this board I don't even know why we bother.

How does a gold standard work if the economy is growing?

Explain to me how corporations and farmers and consumers can borrow money to imp0rove their lot or advance prodcution if there is a STATIC sum of money?

Please somebody tell me how this works in Gold backed economy.

Thus far everybody just seems to ignore this problem.

Well, it's obvious you don't even have a basic understanding of the Gold Standard. Since you're beginning from scratch, it's probably best to just refer you to a site for you to read. Here's one.

About.com: http://www.cato.org/pubs/pas/pa016.html

 

[xsited1]

Makes sense. But how can the suddenly fiscally concerned Republicans score political victory if they don't slam everything Obama does as being wasteful and unnecessary?

Yeah, I know its more than a little ironic given how enthusiastically the Republicans supported Bush and the GOP Congress who ran budget deficits when the economy was fine.

However, its important that there is a legislative check on the Democrats so they can't do anything they want. The Republicans may be incompetent, but there is little evidence that the Democrats are much better.

The Democrats are currently in control of the government. What legislative check on the Democrats are you talking about?

 

[LOki]

Is killing Libertarians your avocation or just a hobby?

He hardly "killed" us Libertarians by posting an article that states that the gold standard, which was hardly a gold standard, was responsible for the Great Depression.

Also, funny how this same idiot's source establishes the real cause of the Depression:

"During World War I, Europe's governments suspended the gold standard. They financed the war with paper money and loans from America."​

The Gold Standard was not the culprit; Fiat Money, and the appurtentant abuses of Fiat Money by political processes was, and is, the culprit.

 

[Iriemon]

Is killing Libertarians your avocation or just a hobby?

He hardly "killed" us Libertarians by posting an article that states that the gold standard, which was hardly a gold standard, was responsible for the Great Depression.

Also, funny how this same idiot's source establishes the real cause of the Depression:

"During World War I, Europe's governments suspended the gold standard. They financed the war with paper money and loans from America."​

The Gold Standard was not the culprit; Fiat Money, and the appurtentant abuses of Fiat Money by political processes was, and is, the culprit.

Except that the major nations went back to the gold standard following WWI, long before the Great Depression, so that doesn't really refute the "idiot's" point. Major nations dropped the gold standard and issued fiat money only after their gold standard economies had tanked because trying to maintain the gold standard was killing the economies.

 

[Truthmatters]

How is it then that the Gold standard can be the answer when you can not control what other countries do?

They can go on and off the gold standard at their own whims and screw you up again huh?

 

[Truthmatters]

No answers?

 

[Iriemon]

How is it then that the Gold standard can be the answer when you can not control what other countries do?

They can go on and off the gold standard at their own whims and screw you up again huh?

That's true. If another nation on the gold standard has a big pile of gold and then goes off the standard, your money supply just shot up and your in deep kimshi.

Why anyone would want something as critically important to be in the control of other nations and the quantity of some metal that is lying around is beyond me.

 

[LOki]

Except that the major nations went back to the gold standard following WWI, long before the Great Depression, so that doesn't really refute the "idiot's" point.

Oh, but it does. Trying to feed a body that has starved to death, will not bring it back to life.

Major nations dropped the gold standard and issued fiat money only after their gold standard economies had tanked because trying to maintain the gold standard was killing the economies.

The gold standard was not killing any economies--those economies were already dead, having committed suicide with their Fiat Money ponzi schemes--Gold Standard economies trying to feed life into those dead economies was what was killing those ecomomies. Rather than propping up those paper printing retards, the rest of the world should have just bought those countries at fire sale prices--they sold their sovereignty when they insisted that stealing was a valid means to aquire wealth, and economic cannibalism was a valid means for creating wealth.

 

[Truthmatters]

The gold standard was unsustainable and that is why it was left.

 

[Iriemon]

Except that the major nations went back to the gold standard following WWI, long before the Great Depression, so that doesn't really refute the "idiot's" point.

Oh, but it does. Trying to feed a body that has starved to death, will not bring it back to life.

Major nations dropped the gold standard and issued fiat money only after their gold standard economies had tanked because trying to maintain the gold standard was killing the economies.

The gold standard was not killing any economies--those economies were already dead, having committed suicide with their Fiat Money ponzi schemes--Gold Standard economies trying to feed life into those dead economies was what was killing those ecomomies. Rather than propping up those paper printing retards, the rest of the world should have just bought those countries at fire sale prices--they sold their sovereignty when they insisted that stealing was a valid means to aquire wealth, and economic cannibalism was a valid means for creating wealth.

Please explain how "Gold Standard economies trying to feed life into those dead economies was what was killing those ecomomies"; and how they were "propping up those paper printing retards"; and how the rest of the world "could have bought those countries (which) at fire sale"; and how they "sold their sovereignty", and what you mean that "they insisted that stealing was a valid means to aquire wealth".

Thanks!

 

[LOki]

The gold standard was unsustainable and that is why it was left.

You make a point. There's far more wealth than gold--some other objective standard would necessarily have to be used. That's the Gold Standard argument--not that gold is the end-all and be-all of economic stabilty, but that a monetary system founded upon an objective standard is more stable than one founded upon some retard's capacity to print money, or force an interest rate.

 

[Iriemon]

The gold standard was unsustainable and that is why it was left.

You make a point. There's far more wealth than gold--some other objective standard would necessarily have to be used. That's the Gold Standard argument--not that gold is the end-all and be-all of economic stabilty, but that a monetary system founded upon an objective standard is more stable than one founded upon some retard's capacity to print money, or force an interest rate.

1. Stability is not necessarily a good thing. Where you have population and economic growth faster than the money supply, you have deflation which is harmful.

2. Stability for gold depends upon what the rest of the world does with its gold.

3. Stability is a function not just of the amount of money but whether it is being lent and utilized. In a recession lending decreases and hoarding ensues, decreasing the money supply, increasing the cost of borrowing. Interest rates go up, right at the very worst time, and a gold chained central bank can't do much about it.

That was why the Fed raised interest rates in the depression, helping to turn it into a great depression.

 

[LOki]

Please explain how "Gold Standard economies trying to feed life into those dead economies was what was killing those ecomomies"; . . .

Artificially holding domestic interest rates, and fixing prices at levels that protect failing [to create wealth in excess of their capacity to consume it] foreign currencies from collapsing is a fine example. I was under the impression you had read up on this.

. . . and how they were "propping up those paper printing retards"; . . .

See above.

. . . and how the rest of the world "could have bought those countries (which) at fire sale"; . . .

Like most nations, these places all have national resources--mines, fisheries, industrial infrastructure, air-space, etc.--buy them; buy it all. Or you could you loan them money, and demand that they put their country up as collateral--and then actually collect either the loan or the collateral.

. . . and how they "sold their sovereignty", . . .

When they devalued their currencies in order to pretend that they were paying their debts, they traded the right to excercise the power of a State--the amassed and coordinated sovereignty of their respective People--for a false entitlement to the lives of their respective Peoples.

. . . and what you mean that "they insisted that stealing was a valid means to aquire wealth".

That's what happens when a nation devalues their currency in order to pretend that they are paying their debts.

Thanks!

You're welcome.

 

[LOki]

1. Stability is not necessarily a good thing.

Sure it is.

Where you have population and economic growth faster than the money supply, you have deflation which is harmful.

I see your problem now--that's INFLATION.

2. Stability for gold depends upon what the rest of the world does with its gold.

Hi. You're a retard. I feel confident that you won't be reading that, because you clearly did not read this:

"You make a point. There's far more wealth than gold--some other objective standard would necessarily have to be used. That's the Gold Standard argument--not that gold is the end-all and be-all of economic stabilty, but that a monetary system founded upon an objective standard is more stable than one founded upon some retard's capacity to print money, or force an interest rate."​

3. Stability is a function not just of the amount of money but whether it is being lent and utilized.

Well, you're just wrong. Monetary stabiltiy is a function of the money being predictably representative of value.

In a recession lending decreases and hoarding ensues, decreasing the money supply, increasing the cost of borrowing. Interest rates go up, right at the very worst time, and a gold chained central bank can't do much about it.

That's a problem of a centrally controlled economy, not a problem of an objectively valued currency.

That was why the Fed raised interest rates in the depression, helping to turn it into a great depression.

Neither of which would have been so depressin, or so great, if we didn't feel compelled to support the currencies of nations that devalued their currencies in order to pretend that they were paying their debts.

 

[Kevin_Kennedy]

The gold standard was unsustainable and that is why it was left.

No, it was left so that the governments could finance their wars by robbing the people of their wealth.

 

[Iriemon]

Please explain how "Gold Standard economies trying to feed life into those dead economies was what was killing those ecomomies"; . . .

Artificially holding domestic interest rates, and fixing prices at levels that protect failing [to create wealth in excess of their capacity to consume it] foreign currencies from collapsing is a fine example. I was under the impression you had read up on this.

No. So can you explain in more detail? What exactly did the US do, for example, to "artificially holding domestic interest rates, and fixing prices at levels that protect failing [to create wealth in excess of their capacity to consume it] foreign currencies from collapsing."

Was this the Fed? Did it set interest rates high or low? What foreign currencies were we trying to keep from collapsing, and how did interest rate policy affect that?

. . . and how they were "propping up those paper printing retards"; . . .

See above.

Like most nations, these places all have national resources--mines, fisheries, industrial infrastructure, air-space, etc.--buy them; buy it all. Or you could you loan them money, and demand that they put their country up as collateral--and then actually collect either the loan or the collateral.[/quote]

By what, walking into the Reichstag and declaring Germany the property of the United States?

When they devalued their currencies in order to pretend that they were paying their debts, they traded the right to excercise the power of a State--the amassed and coordinated sovereignty of their respective People--for a false entitlement to the lives of their respective Peoples.

Jeez I hope not. The US devalued several times while on the gold standard. Who do we surrender to?

 

[Iriemon]

How is it irrelevant whether or not it was a real gold standard when you're blaming the gold standard?

Because we pegged our currencies to the gold system, and that peg caused perverse outcomes in the monetary system.

What matters is the practical outcome of basing your currency on the price of gold, not whether or not the monetary system perfectly ascribed to some Utopian gold standard.

Any time you fix one price relative another you open the door for speculators. There were huge speculations against gold when we were on the gold standard that cost the Govt huge sums to prop it up. Same thing happened when nations tried to fix currencies against one another.

 

[LOki]

Please explain how "Gold Standard economies trying to feed life into those dead economies was what was killing those ecomomies"; . . .

Artificially holding domestic interest rates, and fixing prices at levels that protect failing [to create wealth in excess of their capacity to consume it] foreign currencies from collapsing is a fine example. I was under the impression you had read up on this.

No. So can you explain in more detail? What exactly did the US do, for example, to "artificially holding domestic interest rates, and fixing prices at levels that protect failing [to create wealth in excess of their capacity to consume it] foreign currencies from collapsing."

Was this the Fed? Did it set interest rates high or low? What foreign currencies were we trying to keep from collapsing, and how did interest rate policy affect that?

Here you go.

By what, walking into the Reichstag and declaring Germany the property of the United States?

Not quite, but that's the spirit.

 

[Iriemon]

Artificially holding domestic interest rates, and fixing prices at levels that protect failing [to create wealth in excess of their capacity to consume it] foreign currencies from collapsing is a fine example. I was under the impression you had read up on this.

No. So can you explain in more detail? What exactly did the US do, for example, to "artificially holding domestic interest rates, and fixing prices at levels that protect failing [to create wealth in excess of their capacity to consume it] foreign currencies from collapsing."

Was this the Fed? Did it set interest rates high or low? What foreign currencies were we trying to keep from collapsing, and how did interest rate policy affect that?

Here you go.

Thanks for your response. However it in no way substantiated your claims.

By what, walking into the Reichstag and declaring Germany the property of the United States?

Not quite, but that's the spirit.

Which we can now reject as complete nonsense.