How can there be inflation with gold? Unless you have unlimited gold mines like Mansa Musa or the Spanish Empire (the US does not have this) you cannot add more gold currency to the supply and inflation will not occur.
https://www.history.com/news/how-did-the-gold-standard-contribute-to-the-great-depression
A slowing economy combined with the stock market crash of 1929 and a subsequent wave of bank failures in 1930 and 1931 led to crippling levels of deflation. Soon, the frightened public began hoarding gold.
The United States and other countries on the gold standard couldn’t increase their money supplies to stimulate the economy. Great Britain became the first to drop off the gold standard in 1931. Other countries soon followed.
But the United States didn’t abandon gold for another two years, deepening the pain of the Great Depression.
@metal-brain saidThere isn't going to be WWIII even if BRICS is stupid enough to adopt a gold standard.
So they will resort to WW3 to prevent that?
Is that what you are saying?
Or are you saying BRICS is not going back to the gold standard so the US dollar will not have to?
With inflation plaguing the economy as the U.S. dollar is increasingly being sidelined in international trade, potentially even at risk of losing its status as the global reserve currency, lawmake ...[text shortened]... lution.
https://www.zerohedge.com/political/efforts-protect-us-intensify-amid-global-shift-dollar
We'll ignore it and all it will do is artificially increase the price of gold.
@athousandyoung saidThe USA printed more currency than they had gold to back it all. Then the USA stopped redeeming dollars for gold. The gold standard only works if there is an intention of honoring it.
How can there be inflation with gold? Unless you have unlimited gold mines like Mansa Musa or the Spanish Empire (the US does not have this) you cannot add more gold currency to the supply and inflation will not occur.
https://www.history.com/news/how-did-the-gold-standard-contribute-to-the-great-depression
A slowing economy combined with the stock market ...[text shortened]... tates didn’t abandon gold for another two years, deepening the pain of the Great Depression.
Also, the deflation from the great depression was not caused by the gold standard. That was caused by fractional reserve banking.
@no1marauder saidHow do you think the US dollar became the world reserve currency? The gold standard! BRICS wants the gold standard so BRICS can replace the US dollar as the world reserve currency. That is the smart thing to do in the short term.
There isn't going to be WWIII even if BRICS is stupid enough to adopt a gold standard.
We'll ignore it and all it will do is artificially increase the price of gold.
Would you choose a fiat currency over a gold backed currency?
@metal-brain saidThat's not a gold standard if you print currency that doesn't have gold backing it.
The USA printed more currency than they had gold to back it all. Then the USA stopped redeeming dollars for gold. The gold standard only works if there is an intention of honoring it.
Also, the deflation from the great depression was not caused by the gold standard. That was caused by fractional reserve banking.
@athousandyoung saidTrue, but why tell people? So people all over the world dump US dollars causing the currency to plummet? The whole goal was to go off the gold standard so they could tax people with as much inflation as they wanted. Why do you think the USA had hyperinflation after the gold standard was officially abandoned?
That's not a gold standard if you print currency that doesn't have gold backing it.
Inflation has been unleashed.
@metal-brain saidThe dollar did not become the world's reserve currency until a decade after the gold standard was abandoned.
How do you think the US dollar became the world reserve currency? The gold standard! BRICS wants the gold standard so BRICS can replace the US dollar as the world reserve currency. That is the smart thing to do in the short term.
Would you choose a fiat currency over a gold backed currency?
@metal-brain saidYou're incredibly confused; FDR abandoned the gold standard in 1933.
How do you think the US dollar became the world reserve currency? The gold standard! BRICS wants the gold standard so BRICS can replace the US dollar as the world reserve currency. That is the smart thing to do in the short term.
Would you choose a fiat currency over a gold backed currency?
The US becoming the world's reserve currency happened after WWII because of this country's economic and political dominance.
There's no way a BRICS currency could replace the US dollar as a reserve currency:
" The dollar was on one side of 88% of all foreign exchange trades in April last year, according to the Bank for International Settlements. The Fed estimates that between 1999 and 2019 the dollar accounted for 96% of trade invoicing in the Americas, 74% in the Asia-Pacific region, and 79% in the rest of the world. Banks used the greenback for around 60% of all international deposits and loans."
https://www.reuters.com/breakingviews/global-markets-breakingviews-2023-02-28/#:~:text=The%20dollar%20was%20on%20one%20side%20of%2088%25,and%2079%25%20in%20the%20rest%20of%20the%20world.
Why would anyone but a dictator who is mad that his country has had its dollar foreign assets frozen want to buy some newfangled, high risk currency based on the fluctuating supplies of a shiny metal rather than the dominant currency in the world?
@metal-brain saidThe US had never had anything approaching "hyperinflation" since the gold standard was abandoned.
True, but why tell people? So people all over the world dump US dollars causing the currency to plummet? The whole goal was to go off the gold standard so they could tax people with as much inflation as they wanted. Why do you think the USA had hyperinflation after the gold standard was officially abandoned?
Inflation has been unleashed.
@no1marauder said1979 and 1980 did not experience hyperinflation?
The US had never had anything approaching "hyperinflation" since the gold standard was abandoned.
Define hyperinflation.
@athousandyoung saidWhat is your source of information?
The dollar did not become the world's reserve currency until a decade after the gold standard was abandoned.
25 Aug 23
@metal-brain saidI'll let Investopedia do so:
1979 and 1980 did not experience hyperinflation?
Define hyperinflation.
"Hyperinflation refers to rapid and unrestrained price increases in an economy, typically at rates exceeding 50% each month over time."
https://www.investopedia.com/terms/h/hyperinflation.asp
@no1marauder saidThe dollar was still redeemed for gold until Nixon stopped that.
You're incredibly confused; FDR abandoned the gold standard in 1933.
The US becoming the world's reserve currency happened after WWII because of this country's economic and political dominance.
There's no way a BRICS currency could replace the US dollar as a reserve currency:
" The dollar was on one side of 88% of all foreign exchange trades in April last year, a ...[text shortened]... y based on the fluctuating supplies of a shiny metal rather than the dominant currency in the world?
"There's no way a BRICS currency could replace the US dollar as a reserve currency"
I'm sure people said that of the British currency right before it was replaced by the US dollar. Start using terms like short term and long term. Even after 300 years? You know better. You don't really believe the USA will always maintain economic and political dominance throughout world history, do you?
@no1marauder saidWhat would you call the Carter years inflation? It was still high. No currency could have that much inflation with true intention to honor the gold standard. That high rate of inflation was made possible "BECAUSE" the USA abandoned the gold standard, not despite it.
I'll let Investopedia do so:
"Hyperinflation refers to rapid and unrestrained price increases in an economy, typically at rates exceeding 50% each month over time."
https://www.investopedia.com/terms/h/hyperinflation.asp
@metal-brain saidThe amount of money in circulation should be based on economic activity, not on how much of a shiny metal a central bank holds.
What would you call the Carter years inflation? It was still high. No currency could have that much inflation with true intention to honor the gold standard. That high rate of inflation was made possible "BECAUSE" the USA abandoned the gold standard, not despite it.
Anyway, Inflation was quite high at times between FDR suspending the domestic gold standard and the end of the international Breton Woods agreement which set up a dollar-gold standard; for example:
"Inflation, which was 3.1 percent year over year in June 1946 almost one year after the end of the hostilities, peaked nine months later at 20.1 percent in March 1947."
https://www.guggenheiminvestments.com/perspectives/global-cio-outlook/lessons-fighting-inflation-skip-over-volcker-1946
The 1979-80 inflation was primarily caused by a spike in oil prices because of OPEC and the gold standard couldn't have helped that at all.