On this day in 1933, the United States formally went off the gold standard. In hindsight, was this the correct decision?
Money should be backed by something at least.
It is. By the United States government.
would we assume that the whole world would be on the gold standard? not just the US?
This decision is what has destroyed the equality of Economics. The Value of the Gold would only increase. Inflation would be held into check. The way the World Bankers and Wealthiest elites along with our corrupt Governments siphon the Working Mans wealth away is through inflation created by Fiat Currencies backed by nothing. Those of you who are saying “Our GDP could only grow to the amount of gold we can hold” are just wrong.
Obviously, a country’s GDP can’t grow beyond the amount of gold available if you’re on the golf standard.
GDP is not the best way to determine a country's wealth however.
If we were still on the gold standard, our economy could only be as big as our supply of gold. There would be cyclical economy-breaking bank rushes as people flocked to redeem their physical gold. If you said yes, you wanted a Great Depression once every twenty years or so.
Whoops! I meant if you said ‘no’.
Lol nothing causes economic stability like printing monopoly money at the whim of bureaucrats
I'm not trying to be rude, but that's very unintelligent. The supply (weight of gold available) would not have anything to do with it. The value of it would simply increase.
The gold standard kept all men equal in terms of the economy and kept inflation in check. Not to mention gave an ACTUAL value to our printed money.
That's why inflation has skyrocketed since. They can simply print it. By "they" I mean the unconstitutional Federal Reserve bank which is not federal and is not a reserve. It is a private bank the controls the government by lending it money that it prints. Every time our government prints money by borrowing it, it adds to the debt that WE pay by the increase in inflation. We all pay it, but the average person is too unintelligent to realize how supply and demand works with money. Each year our politicians spend money that they don't have, inflation makes what we do have worth less.
The politicians don't care. They are buying your votes with valueless money.
Rambo, back on the gold standard politicians could still print as much paper money as they wanted. Collectively all the money would only be as valuable as the amount of gold in supply, so each new bill would decrease the value of the rest, same as today’s fiat money system.
Throwback, let’s say the US has one gold bar and nothing more. You can only trade rights to that single bar of gold so much. So we’d have to break that bar of gold into smaller and smaller pieces that could be traded, but each bill corresponding to a smaller piece of that gold would be worth less and less. What if you want to buy a house that is worth more than one bar of gold? You can’t, no such house could exist in this economy, so we’d either have to turn to bartering or pretend that single bar of gold is incredibly valuable. Assigning imaginary value to an object (that bar of gold) that doesn’t actually exist is the same thing as using fiat money (money not backed by gold).
Put another way: fiat money is money whose value is imaginary. It only has value because we say it does. If we don’t have enough gold to equal the value of traded goods at any given moment, we have to assign imaginary value to that gold in order to function. That gold we trade for would only have value because we say it does. It would become the same as fiat money, just our currency would be worthless compared to countries with more gold.
Does that help?
That's wrong. Back on the gold standard each dollar was based on a set amount of gold, they couldn't print into infinity like today
You could once trade a $20 dollar bill for a $20 gold coin. How many pieces of paper would it take now? Fuck you FDR. You piece of shit socialist.
You mean when FDR confiscated the physical wealth of citizens and replaced it with debt?
It will ultimately be the biggest, yet most understated, cause of our financial collapse and demise. All of the crap directly leading us there was made possible by printing unbacked currency.
We have created a boom and burst system which elite benefit from market collapses that rape the people
Which comes along with
- Endless war
- Endless debt
- Endless government expasion
Look behind the curtain of the Federal Reverse and you will see who actually runs this country
Yep. Exactly right.
Otherwise China would have all our gold now. 😊
No gold standard allows for economic growth beyond the value of the nations gold reserves.
No it allows the government to create perpetual war
The Question is incorrect and misleading. President Nixon took the United States off the gold standard on August 15 1971.
It wasn't much of a gold standard by then
A lot of people think that the gold standard is better because it is simpler and easier to understand, but being simpler and easier to understand does not necessarily mean that it is better. That is why people who run the Federal Reserve are highly educated in economics
"Complex things that make no logical sense are better for us cause the people at the fed have degrees in Keynesian economics"
Abrah Cadabrah csnachem de deedum
A puff of smoke
And everyone said All Hail the Powerful Wizard
He who pulls all the strings, owns the mind of those whose strings he pulls.
The Dolly Lama is all powerful to Betten Buddhist
The pope is all powerful to the Catholic
And the Federal Reserve is all powerful to the American public.
And if you let me print money, hand it out to the people that I liked, I guarantee I would be the financial god of that universe.
All of our money is borrowed from the federal reserve. How is that a good idea?
We do not borrow money from the FR
They print money
They Loan us printed money
We have to work to repay them back for their "freshly printed money" plus interest.
Anybody wonder if printing money is a sound business??
Exactly. It’s crazy right?
"the people at the federal reserve have degrees in Keynesian economics".
Well there's your problem right there.
Hey, quite a few Ron Paul morons here...
Not an argument
What does that even mean?
Because basing our economy on a rock with virtually no intrinsic value makes so much sense. Beads. Giant stone disks. Bitcoins. Sheeeesh.
Gold and silver does have intrinsic value you idiot
If gold had zero intrinsic value then it would fluctuate just like any other stock. The fact that central banks still hoard gold (And some recently wanting to buy back their gold) shows that it does have intrinsic value because the paper has no intrinsic value.
Do you know what the word intrinsic means? Gold has little to no intrinsic value. It has the value humans agree it has.
I just explained how it has always had intrinsic value. Repeating the first comment isn't a rebuttal.
No you didn’t. You explained that you don’t know what the word intrinsic means.
That isn't an argument, try again dumbass.
Lmao fine you need me to define words for you? An object with Intrinsic value has value “in itself” meaning that the fucking thing does something that makes it valuable and is not just a place holder for something (which is exactly what gold is). Golds value is no different than paper money. It has value because we agree it has value.
While, let’s say an apple, can have placeholder/symbolic value because I can trade it to you for your services. But it also has INTRINSIC value because it is worth the calories and nutrition if I eat it.
There ya go.
Can you print gold? I'm pretty sure it doesn't grow on trees either... gold is finite, has industrial uses, luxury uses and has been used to store wealth for thousands of years. That last part is the most significant part of its intrinsic value. If gold had no or little intrinsic value as you claim, then banks and treasuries wouldn't use it to store wealth.
STORING WEALTH IS THE EXACT OPPOSITE OF HAVING INTRINSIC VALUE
Holy shit man
The ONLY intrinsic property that is valuable is that it is a good conductor. However so are a lot of things and that is not where it gets even a small percentage of its value from.
You’re having a really hard time with definitions today.
Also, the dollar isn't money. The dollar is just currency since we left the gold standard.
The ability to store value is intrinsic value. You're ignoring facts here.
Storing value is the exact opposite of intrinsic value? Lmao what do you think money is?
What do you think the word intrinsic means?
You’re so laughably far off from the definition
If something’s only value is what something else gives to it it doesn’t have intrinsic value.
If humans did not decide gold was worth money then it wouldn’t be.
That’s why it’s the opposite
Again you’ve completely bungled the definition and are calling me a dumbass for it.
It’s actually really funny
You don't even know what money is so you don't have room to be pretentious about definitions. Intrinsic value is inherent value. Gold has inherent value as being the best resource to store wealth, I've explained this several times yet you're either too brainwashed or stupid to understand. If gold is Like paper currency where its value is arbitrary and based on trust, then explain why gold has ALWAYS outperformed devalued fiat currencies. Protip: you can't.
That’s actually not when we went off the gold standard. We went off the gold standard in 1971. In 1933, FDR signed Executive Order 6102 which demanded the surrender of all privately held billion. Not exactly the same thing, but the first step.
By all means, cite me the piece of history I’m missing..... telling me I’m wrong with nothing to back it up does nothing.
Check out the history channel on this. It appears that FDR did call for all of the gold to be collected and the federal govt then housed all the gold. Then in the 70’s Nixon then signed legislation where individuals could own gold again.
How the hell did FDR have the power to make people turn in their gold? Surely that was a serious abuse of the EO?
Because he was the closest president we had to a dictator. Why do you think he took 4 terms?
FDR was not trying to be a dictator. He was elected into the worst economic period this country has ever seen, 25% of the population was unemployed. He ran for the presidency more than twice because we were into WWII and changing leadership was thought to be a good idea. Besides it was not against the law to run for the presidency 4 times, the only reasons others had not done so was because Washington had not done so.
He had specific ideas of how he wanted to do things, no different than Trump and no more of a dictator than Trump.
....thought not to be a good idea...
He prolonged the worst economic period in America by adopting Keynesian economics and the new deal. Fdr got us into ww2 by inciting japans attack. You have much history to learn.
It wasn't against the law but it was a well known precedent. If it wasn't such a bad thing then why did we adopt term limits? Lol
Because it was a loophole they could see needed to be fixed, much like today’s debate about whether a president could pardon themselves, a loophole that needs to be fixed.
You say I have much to learn about history, there are many ways to look at history, there is not just one version. Many historians do not view FDR as you do.
As far as the Japanese, yes, the United States and the European nations treated them badly. The Japanese were imperialistic just as the U.S. and the European nations, but the west denied them their place and in return the Japanese chose to join Hitler in WWII thinking they would be the dominating power in Asia after WWII.
You say FDR prolonged the worst economic period in our history, but at least he tried to to do something to help the people, rather than to do nothing like Calvin Coolidge and Herbert Hoover. This country had a vocally strong socialist party at the time and quite honestly it was gaining ground in the U.S. because many believed the government did not care about its people and that the wealth was concentrated in the hands of the few, much like today and they believed that should be changed.
While FDR’s policies of the New Deal were not aggressive enough to pull us out of the depression, it was a good start and we were slowly pulling out and when we entered the war that did the rest.
So don’t lay all the blame on FDR, you first have to look at the three failures that preceeded him.
If we aren’t careful, we will be back to those times again since in our infinite wisdom we decided to lift the restrictions on banking, so once again they can play fast & loose with depositors money.
It doesn't matter what the intentions of fdr were the results have proved fatal and are at least responsible for half of the immense debt and government dependence in this country. If he really wanted to help people he should've let the free market stabilize the economy.
Coolidge did way more to help The economy and American people by removing government intervention.
Both of y’all are right on different points. FDR was an awful President and did awful things, Gold confiscation being nowhere near the worst. In EO 9066, he ordered the internment of American citizens who committed no crime just because they had Japanese ancestry. Term limits are an infringement of liberty as we should be allowed to vote for whomever we want. FDR did have a point with WWII, but it was ultimately a marketing gimmick. Not necessarily a bad one, obviously it worked, but command changes happen and it isn’t a bad thing.
Not having government intervention is what got us to the Great Depression to start with. I’m sorry, but if business is not kept in tact they will abuse and take advantage of the worker and the consumer, so I do not buy into this free market concept. As far as the New Deal being what caused people to look at the government to depend on I do not buy that either, that came with the Great Society program of LBJ. My grandfather worked on the WPA and took out a WPA loan to pay for his farm, he would not have taken a handout like welfare from anyone. The jobs those individuals did in the New Deal were no different than the government hiring individuals today.
As far as putting the Japanese in internment camps, yes in our eyes today that was deplorable, but if you think about the mind set back then I t may have also saved many of their lives. Even after the Japanese were released from those camps they were killed when they went back to the areas they lived in.
I grew up around WWII vets and several of them told me that we should have dropped all 5 of the atomic bombs we had. Their mindset was not like ours today.
You say FDR program was responsible for our much of our debt today, I beg to differ on that point as well. If you look at the debt when George W. Bush went into office, you will find that with bipartisan cooperation this country was in far less debt than we had ever been. It was the spending of George W. Bush after 911 that shot us into this debt we are in now.
Lol you're really that ignorant you're going to blame Bush? Look at the budget and you'll see entitlements take up a higher percentage than the military. more people are dependent, the new deal has been the worst piece of legislation that started the destruction of our economy. Yeah those ww2 vets had a different view because they were lied to. Japan attempted to surrender well before the bombs dropped.
I don't care how much money your grandpa leeched off the government he would've done better in a free market. Saying the free market does not benefit the consumer is probably the most ignorant thing you've said in this thread. Freedom gives the optimal amount of choices and competition. The internment camps didn't save any lives, there were no documented "Japanese terrorists". It was a grotesque abuse of state power.
Well if the New Deal was so bad, why is your boy Trump going back to use one of the programs from the New Deal to help farmers?
BTW, what is the difference in the government hiring people to build roads, bridges, etc., any different than hiring people to collect tax money or to run the governmental offices?
Something tells me Rambo isn’t exactly a huge Trump supporter.... government subsidies are always a bad thing and hurt the free market. Including those to farmers.
I just find it interesting that conservatives talk about the free market & and condemns FDR’s New Deal, but when he knows he’s made a bad deal for the US that he knows is going to harm our own economy, he resorts back to one of the New Deal programs.
BTW, for everyone who is so gung-ho on the free market system, go back and study what life was like for the average individual under the free market. It is because of the lack of government regulation that we have unions today. Big business without governmental regulation leads to greater exploration of the worker than we have now. The la JC of governmental regulation of business and banking led us to the Great Depression and the need for government subsidies. It also led to 1,000’s of Americans to join the Communist Party in the US.
The lack of governmental regulation...
No, it was a terrible decision. Especially since we then transitioned to a Dollar Standard which causes numerous foreign policy headaches. Our biggest problem in the Great Depression was trying to prop up the British Empire's finances by inflating our currency to keep the Pound (which was on a gold-exchange standard) from collapsing. We tried our best, but it was an inevitable crash with those policies being kept.
Tom, this is an area where I am not educated in, seems like you have a pretty firm grasp, can you give some details on your stance, thanks!
I'm really bad at economics. Basically, by trial and error, I've found a very few people whose opinions I trust. That's why I started buying silver bullion a few years ago as a hedge against the inevitable economic collapse. I trust a company called Goldline ( goldline.com ). You might give them a call, because their people are VERY knowledgeable. I'm such a non-economics guy that God blessed me with a numbers wizard for a wife – she's a retired COA, and has always (44½ years) handled our finances.
No, it is unequivocally a terrible decision.
To make the currency more easily manipulable and to encourage and hide the cost of debt.
Who actually said yes?
Literally anyone who takes macroeconomics
Unfortunately, the dollar is not back by anything anymore.
It doesn’t have to be backed by a physical substance. Gold is valuable for the same reason a dollar is, because we say it has value. Also, all the gold we’ve ever mined isn’t enough to back our dollar
It doesn’t have to be backed, but it is better to be back by gold than credit.
Unfortunately, it is an argument in futility. The standard will never be changed, because we are far too in debt.
It's enough to back to dollar if we didn't spend like drunken retards.
gold has intrinsic value with a finite amount, not the same as the monopoly money we print.
But when we spend like a bunch of retards, there is economic growth, the country prospers, and unemployment decreases. On the gold standard, there is a lot less opportunity to have economic prosperity.
Less opportunity when people are taxed less? Lol tell me how me how our economy is prospering when the value of the dollar has drooped 98% since we left the gold standard. Creating intergenerational debt may create temporary prosperity for those who manipulate currency, but it also causes bubbles (like the 08 recession) and in long term leads us towards economic collapse.
I find it astounding that you admit that we spend like retards yet you think it is good for the economy. Cognitive dissonance at its finest.
The dollar is backed by trust. People and nations trust the American government to make good on their promises. Simple as that. There is not enough physical gold to back the paper dollar. To go back to the gold standard would probably wreck havoc
I mentioned credit. You are talking about the same thing. We have been experiencing inflation and it will only be as good as long as people trust us.
Going back to a finite amount of currency would create stability not havoc. Printing money out of thin air leads to havoc and history has verified this multiple times.
It was Richard Nixon in 1971 when we went off the gold standard and no. It’s been an obvious disaster.
Better gold standard than no standard
The US didn’t officially go off the gold standard until 1971. In 1933 we stopped using it as our standard exclusively. The is the best way to control over spending and inflation. It is now controlled by our government and how well has that worked out? 21 trillion dollars in debt. WHEN the eventually collapses, and it will, the gold standard will be back.
Here's the nice thing about being an American. Everyone feels like he/she is one of the smartest persons in the world.
That's not exclusive to america. That is the human race.
Going off the gold🏵standard is about as wise as borrowing from Social Security funds for other Federal project😏Look where that’s got us now🤨by the greedy idiots‼️
But a valuation on “goods and services” doesn’t even make sense. I think😂
Not sure, I have to do some research about it. But we should acknowledge that America became the absolute economic superpower. So possibly it wasn’t that bad.
Doesnt seem wise, but we basically run the planet, so I have to assume if we stayed on it things would be different.
Yeah we couldn't afford the perpetual wars
But think about the poor Defense Contractors you’d be putting of work.
The worse decision we ever made that led up to the destruction of our currency. The dollar has lost 98% of its value since then.
Greece and Rome were the first to bring economic collapse this way
Inflation is not necessarily a bad thing. It punishes savers and rewards debtors. And since the US owes so much money, it is good for the US.
So You think we should punish the consumer for saving money? This is the type of shit logic that leads to families having insurmountable debt.
Im not entirely sure it mattered. Were there people that actually kept count? And why gold? We also had silver certificates... Money is such an abstract concept these days. Its now....points.
Yes because the gold standard simply doesn't work. The Federal Reserve has kept inflation relatively stable when compared to the erratic inflation/deflation rates that the dollar had when it was backed by gold.
Ummm...the dollar is now worth about 1.5% of what it was worth then. Not exactly stable, haha.
3% annual inflation is considered stable. This happened in 1933, so yeah, that makes sense.
Considered by whom? The culprits?
Exactly, Liberty. Before the creation of the Federal Reserve, we had 140 years of net deflation. The Federal Reserve is an irreversible Ponzi Scheme.
Now our dollars are worth much less, because the government has a spending addiction. Totally the wrong choice
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Laws created the housing crash
Community Reinvestment Act.
Much backpedaling has been done since that horrific act to downplay its importance, but that was the beginning
Not saying it can’t happen again. Best thing trump can do is not repeat Clinton’s mistake of incentivizing banks to lend to deadbeats
So it gives the lenders more freedom? Good. No one knows better the risks than the lenders
The problem started when Clinton thought he knew lending better than lenders and encouraged them to lend to deadbeats
The government should be lifting central planning regulations while at the same time warning lenders there will be no bailouts
The government should have nothing to do with anything. My grandpa said it right for a long time, anything the government touches it screws up.
You got this wrong. There wasn’t any risk to lenders. They knew the loans they were making were high risk so they bundled them up and sold them off immediately. Credit Rating Agencies intentionally rated these high risk bundles of bad loans as Low Risk investments. Thinking these investments were low risk, many Retirement Funds bought these high risk bundles of bad loans and took substantial losses when the Market collapsed. Credit Rating Agencies, Big Banks and Financial Institutions were given a free pass on this massive scam on the American public.
The crash was caused by Clinton forcing banks to make bad loans, or else they'd be hit with claims of racism in loan approval. Removing regulations and the threat is good.
Ody the reason they were OK with lending their own money to deadbeats is because the government promised to bail them out.
It was an unholy socialist Insurance policy, so they were like ‘fuck it, our competitors are gonna do this so let’s make money’
Lending works best when the lenders are responsible for their risks and aren’t incentivized by government to lend to dead beats
Clinton’s goal was to get everyone in a house. He must have been high as a kite at the time
Eh, we sorta went off the gold standard then. Officially, we went entirely off the gold standard in 1971.
Bretton woods was a bastardized version