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To: Ilaine who wrote (11970)	12/19/2001 11:21:49 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 74559

CB - ...I need to understand how the gold standard was supposed to work in theory, and how it worked in actuality, before I read anything else about that time frame. Hawtrey is good.... Both Rothbard and Reisman make it clear that fractional reserve banking is the problem, whether the reserve is gold or fiat money or tobacco, or whatever. Even actual counterfeit money is far less of a problem, since it is not normally subject to a significant contraction in supply. Although I can't give you a reference, one of the things I read recently claimed that the US historical use of the gold standard has always been in conjunction with fractional reserve banking. Thus it would seem that the historical record will be difficult to use to separate out the effects of the gold standard vs the effects of fractional reserve banking. Regards, Don