TranceAddict Forums (www.tranceaddict.com/forums)
- Political Discussion / Debate
-- Traders can't even drive ....
Pages (6): « 1 2 3 4 5 [6]

In addition, to go off topic just a little, what are your thoughts on the Depression of 1920 and how the government decided to handle that situation and it's outcome?

quote:

Originally posted by DOOMBOT And when the US did suspend the gold standard, why did it take until the beginning of the War for the Depression to end?

When a recession hits and the money supply falls precipitously, the action of increasing the money supply must be made quickly and without delay. It turns out the Federal Reserve did not do that at all, so it should be no surprise that even when gold convertibility was suspended, the economy didn't immediately recover. The genie was already out of the bottle. The financial system had already collapsed. It's like asking why a patient didn't recover when given a blood transfusion after already dying.

quote:

Also, I'm interested in what your thoughts are in regards to the second to last link I posted and the fact that the US had more then enough gold reserves to expand the money supply to "Save" the US from Depression. This little fact shows us that the US didn't really seem to be restrained by being on a gold standard as one may typically believe.

How do you devalue a currency if it is pegged at a fixed price to gold? In addition to the effect of gold hoarding and a run on the currency. Even if the US had the room in the 1930's to increase the money supply, it impossible for gold production to equal that of the overall economic growth. Growing economies need growing money supplies. Growing economies need a money system which is able to rise and fall based on the needs of that economy, not the quantity of gold supplies and production. Yes, back then, they had the gold supply to be able to increase money supply. Today, that is not the case. There is barely enough gold to cover half the current money supply.

quote:

Originally posted by DOOMBOT And still we have rising foreclosures, rising job losses, rising commercial loan losses and more ARMs to reset.

That's expected in a recession. It's a correction. Why does that surprise you. The key is the financial system did not collapse. Their primary goal was to prevent a systemic collapse of the financial system. The financial system did collapse in 1933. It did not in 2008. This isn't the Second Great Depression and Bernanke made sure of that.

quote:

Originally posted by Communist When a recession hits and the money supply falls precipitously, the action of increasing the money supply must be made quickly and without delay. It turns out the Federal Reserve did not do that at all, so it should be no surprise that even when gold convertibility was suspended, the economy didn't immediately recover. The genie was already out of the bottle. The financial system had already collapsed. It's like asking why a patient didn't recover when given a blood transfusion after already dying.

But when the government suspended the gold standard in 1933, I believe it was, the money supply increased. So again, I ask, why did it take so long to get out of the Depression once the money supply increased?

quote:

How do you devalue a currency if it is pegged at a fixed price to gold? In addition to the effect of gold hoarding and a run on the currency. Even if the US had the room in the 1930's to increase the money supply, it impossible for gold production to equal that of the overall economic growth. Growing economies need growing money supplies. Growing economies need a money system which is able to rise and fall based on the needs of that economy, not the quantity of gold supplies and production. Yes, back then, they had the gold supply to be able to increase money supply. Today, that is not the case. There is barely enough gold to cover half the current money supply.

There was no need for an exorbitant amount of gold production to increase the money supply, though. They already had the excess reserves to do so.

Your last sentence, by the way, is irrelevant, even though it is not true.

quote:

Originally posted by Communist That's expected in a recession. It's a correction. Why does that surprise you. The key is the financial system did not collapse. Their primary goal was to prevent a systemic collapse of the financial system. The financial system did collapse in 1933. It did not in 2008. This isn't the Second Great Depression and Bernanke made sure of that.

You are acting as if we are out of this mess, when we clearly are not. So be careful with your last sentence, as the show is not over.

quote:

Originally posted by DOOMBOT In addition, to go off topic just a little, what are your thoughts on the Depression of 1920 and how the government decided to handle that situation and it's outcome?

Well, as you probably know, the economy was undergoing a transition from a wartime economy to a peacetime one. (Note how they suspended gold convertibility during the war.) The period of inflation during the war was followed by a period of deflation. Deflation of money supply should be met with a reduction in key interest rates and an increase in the money supply. Unfortunately, this was not done.

quote:

Originally posted by DOOMBOT But when the government suspended the gold standard in 1933, I believe it was, the money supply increased. So again, I ask, why did it take so long to get out of the Depression once the money supply increased?

I just told you. The economy had already collapsed. Too little too late. I even gave you an analogy. I can't make it any simpler to you.

quote:

There was no need for an exorbitant amount of gold production to increase the money supply, though. They already had the excess reserves to do so.

We'v already discussed the Federal Reserve's mistake in not increasing the money supply in 1929-1933.

quote:

Your last sentence, by the way, is irrelevant, even though it is not true.

I kind of went off on a tangent, but no it's not wrong. The total amount of gold mined out of the ground equals about $4.5 trillion. The currency in circulation right now is about $9 trillion. You'r all for free markets and everything, but for some reason, you'r for a fixed price of gold, and a currency controlled by gold production instead of the free market.

quote:

Originally posted by DOOMBOT You are acting as if we are out of this mess, when we clearly are not. So be careful with your last sentence, as the show is not over.

What don't you understand about the difference between a financial systemic collapse and a recession whose financial system remains intact?

quote:

Originally posted by DOOMBOT Ok, understood. I still rightfully disagree and believe the stimulus, expansion of government and ease of credit were much more destructive then the dollar being linked to gold. I mean, let's face it, the fact that we were on a gold standard didn't seem to stop the government from all of the "stimulus" that it created.

you can believe whatever you want, you're still wrong.

quote:

Originally posted by DOOMBOT http://www.federalreserve.gov/BOARD...108/default.htm Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

i was wondering if you would attempt to take this line out of context to serve your own ends. im a little disappointed you've tried. bernanke is referring to the federal reserve's lack of action leading up to and during the collapse of the banks in the US. and part of that lack of action was due to the gold standard.

im sorry man but you really show you don't really know what you're talking about, or are unable to make reasonable inferences from the information presented. bernanke explained during that speech what we meant by "we did it", and you've merely attached yourself to that minor paragraph to try and make it sound like he's saying something he's not.

not very honest of you.

quote:

Originally posted by Lebezniatnikov I don't disagree with you, but there are people who get into Harvard and elect to go somewhere that has offered to pay for four years.

if YOU turned down harvard for another school because of a scholarship you had bad advice.

seriously though, did you get into harvard?

quote:

Originally posted by jerZ07002 if YOU turned down harvard for another school because of a scholarship you had bad advice. seriously though, did you get into harvard?

I actually didn't apply to Harvard, but I got into a couple that are pretty close. I wanted the liberal arts school experience... and a free education.

quote:

Originally posted by DOOMBOT And occrider, are my links from the vice president and economist in the Research Department of the Federal Reserve Bank of Cleveland not good enough because they are too easy to come by? haha

So you're conflating my post as a repudiation of a random link you posted a multitude of arguments ago?

I'm perfectly willing to argue on the same page with you if you would like to discuss the fed or the gold standard or whatever. I'm on vacation

quote:

Originally posted by Lebezniatnikov I actually didn't apply to Harvard, but I got into a couple that are pretty close. I wanted the liberal arts school experience... and a free education.

What, not into buying contacs

My guess is you're at Berkley.

Powered by: vBulletin
Copyright © 2000-2021, Jelsoft Enterprises Ltd.