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The Gold Standard and the Great Depression (1997)

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Re: The Gold Standard and the Great Depression (1997)

#11

Post by louloulou »

andrewmutz wrote: post #8
BenoitEssiambre wrote: post #3

I have an hypothesis that the same could happen with deflationary cryptocurrencies if they become used widely enough in financial institutions that central banks decide they should tie part of the monetary system to them. https://benoitessiambre.com/specter.html

100% Agree. From everything I've read, our being able to print money is an indispensable tool during financial crises. Fixing the great depression and the great recession depended on this ability. If the world transitions to cryptocurrencies whose supply is unmanaged or fixed, that will not be possible and presumably will be stuck during financial crises.

All printing money does is transfer wealth from savers (people long the currency) to debtors (people short the currency) without their consent. Large financial crises occur because this keeps happening. Bitcoin is a way out, as savers learn it's foolish to be long fiat currency.

Re: The Gold Standard and the Great Depression (1997)

#12

Post by inglor_cz »

ur-whale wrote: post #9
andrewmutz wrote: post #8

Earlier quoted context omitted.

100% Agree. From everything I've read, our being able to print money is an indispensable tool during financial crises. Fixing the great depression and the great recession depended on this ability. If the world transitions to cryptocurrencies whose supply is unmanaged or fixed, that will not be possible and presumably will be stuck during financial crises.

> From everything I've read, our being able to print money is an indispensable tool during financial crises. You might want to add to your reading list the history of the Roman empire.

Not the OP, but this is a smug and not very helpful comment. The Roman empire era covered 1000 years in the West and 2000 years in the east. Can you be more concrete?

Re: The Gold Standard and the Great Depression (1997)

#13

Post by aazaa »

The article begins with the idea that the causes of the Great Depression are not known or too numerous to pin down. It then continues by claiming that "recent scholarship has resulted in striking agreement on the reason for the crisis." The cause of the Great Depression was the gold standard, according to the article:

> ... The constraints of the gold-standard system hamstrung countries as they struggled to adapt during the 1920s to changes in the world economy. ... Central bankers continued to kick the world economy while it was down until it lost consciousness.

What this article ignores, like countless articles before and since, is the Roaring 20s. Articles like this treat the Great Depression as an event that hit the US economy out of the blue. But even superficial study of the ten years prior reveals something obvious: a massive, compounding, technology-fueled asset bubble.

The article also ignores the event that kicked off the Roaring 20s: the depression of 1920-1921:

https://en.wikipedia.org/wiki/Depression_of_1920–1921

This depression resolved itself under a gold standard regime and with minimal intervention by the Federal Government and Federal Reserve.

50 years ago the US abandoned the last vestiges of the gold standard. Today we find ourselves in the middle of a technology-fueled asset bubble. The US president talks, without a hint of embarrassment, about the need to borrow to continue to service debts. This is, of course, the very definition of a Ponzi scheme.

Whatever this comes to, we won't have the gold standard to kick around. It's been out of the picture for decades. What happens when the world's governments decide to outdo each other on how much currency they can conjure into being?

Re: The Gold Standard and the Great Depression (1997)

#14

Post by jjoonathan »

anonporridge wrote: post #7
sleepysysadmin wrote: post #4

We are pre-great depression in many respects. Debt levels being at very high percentages. Income inequality out of control. Inflation out of control. Fundamentally as well it's the baby boomer's fault. Right before the great depression was when the boomers of the american civil war were retiring. The 1980s inflation and crashes were WW1 boomers and now is the WW2 baby boomers retiring. History repeats.

The United States at least is actively in a great depression. It's just being papered over with currency debasement so rich people don't notice. But if you actually visit parts of this country that are outside of the wealthy, coastal bubbles, you'll see first hand the real world devastation that's happening to people. It's why there's a major opioid epidemic in the Midwest. It's why homelessness is exploding. It's wh…

That's not the result of a hidden depression, it's the result of intentionally giving control of society to capital and then capital throwing labor under the bus through wage and environmental arbitrage. It's the system working as intended, a feature not a bug. If we enter an actual depression, it will compound on top of the inequality.

Re: The Gold Standard and the Great Depression (1997)

#15

Post by ur-whale »

inglor_cz wrote: post #12
ur-whale wrote: post #9

Earlier quoted context omitted.

> From everything I've read, our being able to print money is an indispensable tool during financial crises. You might want to add to your reading list the history of the Roman empire.

Not the OP, but this is a smug and not very helpful comment. The Roman empire era covered 1000 years in the West and 2000 years in the east. Can you be more concrete?

since we're apparently being smug:

https://www.google.com/search?q=currency+debasement+roman+em...

Re: The Gold Standard and the Great Depression (1997)

#16

Post by vvoaterr »

aazaa wrote: post #13

The article begins with the idea that the causes of the Great Depression are not known or too numerous to pin down. It then continues by claiming that "recent scholarship has resulted in striking agreement on the reason for the crisis." The cause of the Great Depression was the gold standard, according to the article: > ... The constraints of the gold-standard system hamstrung countries as they struggled to adapt dur…

Anybody is welcome to download the Robinhood app, and buy FAANG/FAGMAN stocks with all your disposable income. Then you, too, will be contributing to the leading cause of the next "Great Depression", plus, you'll come out of it having become quite Rich.

You're welcome.

Re: The Gold Standard and the Great Depression (1997)

#17

Post by praxulus »

aazaa wrote: post #13

The article begins with the idea that the causes of the Great Depression are not known or too numerous to pin down. It then continues by claiming that "recent scholarship has resulted in striking agreement on the reason for the crisis." The cause of the Great Depression was the gold standard, according to the article: > ... The constraints of the gold-standard system hamstrung countries as they struggled to adapt dur…

> This is, of course, the very definition of a Ponzi scheme.

Most Ponzi schemes don't have the authority to levy taxes on the largest economy the in world, nor are they backed by the most powerful military force humanity has ever seen.

Re: The Gold Standard and the Great Depression (1997)

#18

Post by [deleted] »

inglor_cz wrote: post #12
ur-whale wrote: post #9

Earlier quoted context omitted.

> From everything I've read, our being able to print money is an indispensable tool during financial crises. You might want to add to your reading list the history of the Roman empire.

Not the OP, but this is a smug and not very helpful comment. The Roman empire era covered 1000 years in the West and 2000 years in the east. Can you be more concrete?

[deleted]

Re: The Gold Standard and the Great Depression (1997)

#19

Post by mohanmcgeek »

louloulou wrote: post #11
andrewmutz wrote: post #8

Earlier quoted context omitted.

100% Agree. From everything I've read, our being able to print money is an indispensable tool during financial crises. Fixing the great depression and the great recession depended on this ability. If the world transitions to cryptocurrencies whose supply is unmanaged or fixed, that will not be possible and presumably will be stuck during financial crises.

All printing money does is transfer wealth from savers (people long the currency) to debtors (people short the currency) without their consent. Large financial crises occur because this keeps happening. Bitcoin is a way out, as savers learn it's foolish to be long fiat currency.

"printing" money does not cause inflation. Low interest rates can cause credit expansion, they don't necessarily cause inflation.

Inflation rate higher than the deposit interest rate (negative real interest rate) is causes the wealth transfer.

"Savers", in reality, lenders have always had a way out in this situation: investing.

As in every investment boom, there are Ponzi schemes and during this one it happens to be Bitcoin.

Re: The Gold Standard and the Great Depression (1997)

#20

Post by Lifelarper »

andrewmutz wrote: post #8
BenoitEssiambre wrote: post #3

I have an hypothesis that the same could happen with deflationary cryptocurrencies if they become used widely enough in financial institutions that central banks decide they should tie part of the monetary system to them. https://benoitessiambre.com/specter.html

100% Agree. From everything I've read, our being able to print money is an indispensable tool during financial crises. Fixing the great depression and the great recession depended on this ability. If the world transitions to cryptocurrencies whose supply is unmanaged or fixed, that will not be possible and presumably will be stuck during financial crises.

Venezuela, once one of the richest coutries on Earth with more oil than Saudi Arabia thought this way too.

Turned out great for them. By all metrics they should be Western Europe level rich and yet many young kids find it more profitable to mine coins in runescape 12 hours a day rather than actually get a job, strange how that happens hey, if only they printed more Bolivar this all could have been avoided?

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