Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

> the Federal reserve is to blame for it! Between 1923 - 1927, just 10 years after the Fed was formed, it grew money supply 60%.

I’m not an economist so I’m speaking from a position of ignorance here. But I thought the US was on gold standard during this time period.

How was the Fed able to increase money supply by such a large % without e.g. the country mining a lot more gold?

I tried a cursory search but was unable to find any answers.



That is exactly the problem. They issued more currency than there was gold in the reserve. I.e. they broke the gold standard.


Looking at charts of the US gold supply it seems to have grown fairly significantly in the early 1900s up to the great depression, and seems to have been more than the 60% cited for money supply growth.


The same reason Nixon had to take the U.S off the gold standard in 1971 - the government printed more dollars than it had gold to back. Just because you have a gold standard won't stop politicians from printing cash when they need it.

The only way to stop politicians meddling with money is to denationalize it and eliminate legal tender laws.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: