>>The sooner the better.<<
Actually I promised more than I can deliver anytime soon. I've been working on a history of the Great Depression, and the French are next. I've read about it but haven't written it yet.
As succinctly as I can, the combatant nations went off the gold standard during WWI, and started going back on in 1926, Brits first, France last (1928). French politicians, for reasons of national pique at the Germans, adjusted their interest rates and reserve ratios so that they wound up with - well, to start with I have to tell you that the US had a big slug of the world's gold, and then the French accumulated another big slug of it, which meant that there wasn't enough gold in circulation to back Germany and Austria's gold certificates, so their banks crashed.
And then everybody else's did, too, because we're all interconnected. Our economies, that is.
And then they all went through a round or two of what is called competitive devaluation, trying to get their hands on more gold (there wasn't enough gold to back all the money they printed during WWI at the ratio it had originally been set), so all the gold kept being shipped here and then being shipped there (I need to explain the concept of "hot money") and that threw everything out of whack, businesses failing right and left and massive unemployment. Worldwide. And then WWII.
I never have really understood why the French did it, but DeGaulle did something similar in the early 1970's, which collapsed the Bretton Woods agreement and that finally killed the gold standard. I know that DeGaulle did it for reasons of national pride and/or pique. At any rate I remember the recession - it was around 1972.
Caveat: I should mention that the US also caused the Great Depression, and so did the Brits, and so did Germany, which is why the Great Depression was Great. |
