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

To: Tommaso who wrote (71743)	10/12/2006 11:58:20 AM
From: bart13	Read Replies (1) \| Respond to of 110194

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. I also haven't had a chance yet to check out the full story on the laws on gold backing - its one of many things on which I'm back logged - but its a low priority. My basic point remains that the connection between gold and the money supply even before 1933, and certainly afterwards, was tenuous at best. I also think its open to interpretation how much the actual money supply and credit and base adds in the '30s worked. It certainly didn't get the Dow doing another moon shot but it also ended the "official" depression.