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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (71736)	10/12/2006 10:35:28 AM
From: Tommaso	Read Replies (1) \| Respond to of 110194

>>>Gold was disconnected from the money supply, and the money supply also had little correlation with gold at the Treasury or the Fed since well before 1933.<<< Until 1965, Federal reserve Banks were supposed to hold 25% of their deposits (from other banks) and 25% of their currency as gold certificates or gold bullion. At that time, the requirement ended. Then in 1974, all gold payments to other governments were suspended. The U. S. public had not been allowed to own gold since 1934, and under Kennedy, even ownership of gold abroad was made illegal, though how that was to be enforced never was very clear. I wonder if any U. S. citzen was ever prosecuted for owning gold coins in a Swiss safe deposit box. I have so far been unable to find an account of exactly how the rules changed over the years as to what the percentage of actual gold backing for the dollar had to be. But when Roosevelt exercised the power given him by Congress and raised the price of gold by nearly 75% (devaluing the dollar against other currencies), he certainly did intend to inflate the money supply. That was the whole idea. It didn't work, but it was supposed to raise prices back to "normal" and end deflation. I would like to know what percentage banks were required to have in gold as backing for their deposits, at different times (1.e. 1913, 1921, 1929, 1935, 1950). Bank examiners used to demand to see the gold, or gold certificates. At times there was quite a business of sending stagecoaches ahead of the bank examiners carrying gold from one country bank to another to satisfy this reqirement. This went on in Scotland as well as in the United States.