Tornado Alley (PROG)

[fuagf]

While watching OLympic golf i went back to school, just a few on the gold standard
which Nixon 1971 finally, after it had been modified a few times by others, sank.

What Is the Nixon Shock? Definition, What Happened, and Aftereffects
By Will Kenton
Updated February 08, 2024
Reviewed by Robert C. Kelly
https://www.investopedia.com/terms/n/nixon-shock.asp

A few from closer to home, 2007 - 2010.

SOFT CURRENCY ECONOMICS
[...]Fiat Money
Historically, there have been three categories of money: commodity, credit, and fiat. Commodity money consists of some durable material of intrinsic value, typically gold or silver coin, which has some value other than as a medium of exchange. Gold and silver have industrial uses as well as an aesthetic value as jewelry. Credit money refers to the liability of some individual or firm, usually a checkable bank deposit. Fiat money is a tax credit not backed by any tangible asset.
[...]The Myth of the Money Multiplier
[...]Everyone who has studied money and banking has been introduced to the concept of the money multiplier. The multiplier is a factor which links a change in the monetary base (reserves + currency) to a change in the money supply. The multiplier tells us what multiple of the monetary base is transformed into the money supply (M = m x MB). Since George Washington's portrait first graced the one dollar bill students have listened to the same explanation of the process. No matter what the legally required reserve ratio was, the standard example always assumed 10 percent so that the math was simple enough for college professors. What joy must have spread through the entire financial community when, on April 12, 1992, the Fed, for the first time, set the required reserve ratio at the magical 10 percent. Given the simplicity and widespread understanding of the money multiplier it is a shame that the myth must be laid to rest.
P - The truth is the opposite of the textbook model. In the real world banks make loans independent of reserve positions, then during the next accounting period borrow any needed reserves. The imperatives of the accounting system, as previously discussed, require the Fed to lend the banks whatever they need.
2010 - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=46576958

Learning from the Great Depression
[...]
For a long time people disapproved of fiat money, fearing that governments could erode the value of money by permitting inflation or by deciding to 'devalue' their currency against other countries' currencies.
P - The hyperinflation in Germany's Weimar Republic in the early 1920s convinced central bankers of the need to return to the gold standard. (In those days, the Commonwealth Bank was a government-owned trading bank and the central bank.)
P - Trouble is, a country that suffers a major fall in the value of its exports - a deterioration in its terms of trade - needs to respond by devaluing its currency. So sticking with the gold standard ensured the avoidance of inflation, but did so by crunching the economy.
2009 - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=43583486

Gold At $14,172 An Ounce?
2009 - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=34774397

Is the Dollar Doomed?
2009 - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=34773734

Cutting Wages Won't Solve Big Three's Problems
[...] Some lawmakers have complained that unions are the source of the problem, but they fail to understand some inconvenient truths. According to the latest figures from the U.S. Commerce Department, every worker in Big Three factories could work for free and only shave 5 percent off the cost of their cars. The auto companies pay as much for hubcaps and fenders as they do in wages.
2008 - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=33998035

I only know that this government is no chance for gold, in any...
[...]Moreover, because the gold standard gives government very little discretion to use monetary policy, economies on the gold standard are less able to avoid or offset either monetary or real shocks. Real output, therefore, is more variable under the gold standard. The coefficient of variation for real output was 3.5 between 1879 and 1913, and only 1.5 between 1946 and 1990. Not coincidentally, since the government could not have discretion over monetary policy, unemployment was higher during the gold standard. It averaged 6.8 percent in the United States between 1879 and 1913 versus 5.6 percent between 1946 and 1990.
P - Finally, any consideration of the pros and cons of the gold standard must include a very large negative: the resource cost of producing gold. Milton Friedman estimated the cost of maintaining a full gold coin standard for the United States in 1960 to be more than 2.5 percent of GNP. In 1990 this cost would have been $137 billion.
Conclusion
Although the last vestiges of the gold standard disappeared in 1971, its appeal is still strong. Those who oppose giving discretionary powers to the central bank are attracted by the simplicity of its basic rule. Others view it as an effective anchor for the world price level. Still others look back longingly to the fixity of exchange rates. However, despite its appeal, many of the conditions which made the gold standard so successful vanished in 1914. In particular, the importance that governments attach to full employment means that they are unlikely to make maintaining the gold standard link and its corollary, long-run price stability, the primary goal of economic policy."
2007 - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=18152014