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Wednesday, April 6, 2011

Today is the 78th anniversary for the banning of private gold holdings during the Great Depression.

Executive order #6102 instructed all US citizens to turn in their gold coins and bullion by May 1, 1933. This was the end of the commodity/gold standard as it was known back then.


9 comments:

GoldBugg said...

I guess that also makes today the 78th anniversary of massive government debt and an unsustainable economic system?

Randall Parker said...

Dear GoldBugg: I guess if you need/want to view it like that. Alternatively, then, it is also the 78th anniversary of the first day of the end of the system that was the single greatest reason why we had the Great Depression and why it was as deep, prolonged and pervasive world-wide as it was. The gold standard was not sustainable, I think that is abundantly clear. If that is your proposed alternative for sustainability, count me out. And thanks for the visit. I have much more to say on these matters. And thanks also for not being nasty. I have people emailing me saying some pretty filthy things. I suspect it is the "Gold Freaks" of the world, perhaps not. No matter. I grew up on the streets of Chicago. Heard it all before. God bless them.

GoldBugg said...

Regarding the statement that "the single greatest reason why we had the Great Depression and why it was as deep, prolonged and pervasive world-wide as it was", and knowing your previous comments regarding worldwide gold abandonment and recovery, I'm quite disappointed that you (and your colleagues) break the very mantra that you likely teach to your undergrads: "CORRELATION DOES NOT IMPLY CAUSATION".

Maybe the gold standard as used in the 1920's wasn't sustainable. However, stating that "the gold standard was not sustainable, I think that is abundantly clear" is quite the strong statement considering (if I'm not mistaken) Milton Friedman disagreed with a similar statement in your very own book.

Kind words only from this mouth, may Buddha's smile enlighten the dismay of others, and thanks for the reply!

Randall Parker said...

There is no greater example of economic causation in the history of guilty man. There are many reasons to be disappointed in me, but that is not one of them.

Have a wonderful day.

rEVOLution said...

Wait a minute, you claim the gold standard wasn't sustainable yet in you own book Friedman disagrees? Let me ask you this Doc, where's your nobel?

Randall Parker said...

And now you see why I don't waste my time answering comments.

FlackaWacka said...

Wait a minute here. Although I don't know Friedman's statement and I'm a Friedman fan, since when did a Nobel Prize in economics make one the end all authority of economics as a whole? If that's the case, according to Krugman, the $787b ERRA wasn't nearly big enough. Boy, let's hope not........

GoldBugg said...

"The resumption of the gold standard was not doomed to failure. Everything depended on how it was resumed........So I don't believe the resumption of the gold standard was inevitably destined to fail. But given the way in which the resumption occurred, it could not last....... I think that the gold standard could have been resumed and might have been successful if it had been done in a different way than it was done."

Excerpt from Friedman taken out of "Reflections on the Great Depression"

Jeffrey said...

Dr. Parker you are correct, the gold standard is not sustainable with a government that uses force to create a monopoly on money creation, controls the price of interest, and engages in deficit spending.

The question is: Which is the real evil? Price controls and the theft of taxation through inflation - OR - Using commodity money for trade?

Do you believe people who are coining gold and silver are economic terrorists? Our government has ruled that they are. Either competition and freedom make the world a better place or they do not. If competition is not a good thing then lets give the government everything they want so they can make all of our lives better.