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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (21850)	7/29/2002 10:49:22 PM
From: Ilaine	Respond to of 74559

I hope you printed out Mundell's lecture, and take that with you, and if you can find Polanyi's "Great Transformation," take that, too. I recommend both to you because you are interested in gold, and they are both very good explanations about the demise of the gold standard (more precisely, in my opinion, the gold exchange standard). Keynes and Hayek both predicted in advance that returning to the gold standard at an artificially low exchange rate would be destructive. Everyone points to the Fed's decision to maintaining low interest rates in order to keep "hot money" from flowing to the US, which still managed to accumulate 50% of the world's gold. The only comparables I can see in recent economy are the Fed's decision to pump a lot of liquidity into the economy for Y2K, and the US decision to prop up the yen. Exchange rate fluctuations happen, boom markets happen, bear markets happen. Trying to go back on gold in the 1920's and failing changed the entire world, not for the better.