SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : Clown-Free Zone... sorry, no clowns allowed
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Davy Crockett who wrote (111529)7/6/2001 11:49:57 PM
From: Ilaine  Read Replies (1) of 436258
 
US dollar-to-gold ratio was fixed by US federal law at $19.39/ounce in 1792. Raised to $20.67 in 1844. From 1861-1879 (U.S. Civil War era) it floated, then was again fixed at $20.67. Did not change again until 1934, when it was raised to $35 by fiat of Franklin Delano Roosevelt.

The suggestion that the price of gold in the United States increased during the Great Depression due to market forces is bogus. Roosevelt wanted to reflate the currency and picked $35 out of the air.

P.S. It worked. Every country in the world that went off the gold standard in the 1930's recovered financially almost immediately.

~~~~~~~~~~~~~~~~~~~~~~~~~~
If you study the price of commodities prior to and during the Great Depression, you will see very clearly that commodity price decline predated the financial devastation the global economy suffered. People then understood that deflation was what destroyed the economy.

During World War I, the combatant nations went off the gold standard, and printed money. After the war, Great Britain and the United States returned to the gold standard at the same ratio as before the war, despite the fact that there was 3-5 times as much currency in circulation.

The worst example of commodity deflation I am aware of is wheat. It was $2.19 a bushel in 1919 (a year of great inflation) $1.43 in 1925 (the year that England went back on the gold standard) and .38 cents a bushel in 1931-1932. (1932-1933 were the darkest years of the Depression in the United States.)

I think it would be interesting to compare the price of commodities to gold AND dollars. The raw material is available here for free:

nber.org
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News