Gold
is still significantly on demand and has an intrinsic value that cannot be
compared to many currencies as its supply cannot be replenished. The article characterizes one of the major causes
of the Great Depression to be the Gold Standard. In lecture we learned this to
be true, along with the Stock Market Crash and the Bank Panics. The Gold Standard
maintained a fixed exchange rate that forced domestic interest rates through the roof as French interest rates increased.
Government was able to use neither fiscal nor monetary policy to stimulate the
economy. The US remained on the Gold Standard in order to keep foreign
investments strong and it wasn’t until they got rid of it that the economy was
able to stabilize.
http://www.commodityonline.com/news/gold-standard-supporters-are-lunatics-and-hacks-nouriel-roubini-44206-3-1.html
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