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

To: Hawkmoon who wrote (99550)	11/9/2008 6:58:36 PM
From: Robin Plunder	2 Recommendations Respond to of 110194

"so far you have not fleshed out examples in which a gold standard has failed... Prime example.. The civil war when Lincoln realized that only the issuance of "Greenbacks" would provide the necessary financial resources necessary to wage that war. Second example.. England and World War I: en.wikipedia.org And then Churchill finally agreed to return England to the pre-war priced gold standard in 1925, which led to a deflationary spiral that culminated with the 1929 crash: As had happened after previous major wars, the UK was returned to the gold standard in 1925, by a somewhat reluctant Winston Churchill. Although a higher gold price and significant inflation had followed the wartime suspension, Churchill followed tradition by resuming conversion payments at the pre-war gold price. For five years prior to 1925 the gold price was managed downward to the pre-war level, causing deflation throughout those countries of the British Empire and Commonwealth using the Pound Sterling." this is my point...the gold standard does not fail due to loss of currency value...it "fails" because govt wants to spend beyond it means... in contrast, fiat money fails because it goes to zero value, ie, its fundamental value. robin