The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: JF Quinnelly who wrote (71615)	10/11/2006 1:28:48 AM
From: bart13	Read Replies (1) of 110194

Individuals were prohibited from owning gold in 1933, but gold still backed the money supply in various degrees until 1973. FDR's revaluing the exchange rate of dollars to gold increased the monetary base by nearly 75%. I generally agreed with the rest of your post but still fail to see or understand most of the above portion. The gold backing starting in 1933 basically only applied to international transactions and dollar backing between int'l banks to the best of my knowledge, and therefore only applied to the international value of the dollar - not the value inside the US or the US money supply. If a US citizen can 'own' money, but not gold, the relationship between gold and money (and money supply) is broken. The monetary base is generally currency plus bank reserves (which does not include the Fed or Treasury reserves), and those have always been measured in dollars, not gold. It averaged about $6 billion in 1929, 5.6 in 1930, 6.2 in 1931, 6.6 in 1932, 7.0 in 1933, 7.8 in 1934 and 9.4 in 1935.

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