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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: regli who wrote (27843)	3/4/2005 7:36:16 PM
From: Elroy Jetson	Read Replies (2) of 110194

During the 1930s it wasn't the US that was short of gold, it was the UK. The US was really purchasing gold on behalf of the Bank of England. Charles Rist, governor of the Bank of France and one of only three economists of the era to predict the Great Depression, had advised Britain that they were over-valuing the Pound Sterling when Britain went back on the gold standard. The other two economists who predicted the Great Depression were Swedish economist Gustav Cassel and Austrian economist Ludwig von Mises. This flattering over-valuation of the Pound Sterling led to a run on the UK gold stocks as other nations sought to exchange their paper Pounds for gold. Montague Norman persuaded Benjamin Strong of the US Federal Reserve to come to their aid. Charles Rist from the Bank of France and Hjalmar Schacht from the German Reichsbank told Norman and Strong that they had no intention of joining the US and UK in a beggar-thy-neighbor round of currency devaluations. This helped France and Germany avoid the worst of the Depression, although not Hitler. .

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