The Gold Standard and the Great Depression (1997)
The article begins with the idea that the causes of the Great Depression are not known or too numerous to pin down. It then continues by claiming that &quot;recent scholarship has resulted in striking agreement on the reason for the crisis.&quot; The cause of the Great Depression was the gold standard, according to the article:<p>&gt; ... The constraints of the gold-standard system hamstrung countries as they struggled to adapt during the 1920s to changes in the world economy. ... Central bankers continued to kick the world economy while it was down until it lost consciousness.<p>What this article ignores, like countless articles before and since, is the Roaring 20s. Articles like this treat the Great Depression as an event that hit the US economy out of the blue. But even superficial study of the ten years prior reveals something obvious: a massive, compounding, technology-fueled asset bubble.<p>The article also ignores the event that kicked off the Roaring 20s: the depression of 1920-1921:<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Depression_of_1920–1921" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Depression_of_1920–1921</a><p>This depression resolved itself under a gold standard regime and with minimal intervention by the Federal Government and Federal Reserve.<p>50 years ago the US abandoned the last vestiges of the gold standard. Today we find ourselves in the middle of a technology-fueled asset bubble. The US president talks, without a hint of embarrassment, about the need to borrow to continue to service debts. This is, of course, the very definition of a Ponzi scheme.<p>Whatever this comes to, we won&#x27;t have the gold standard to kick around. It&#x27;s been out of the picture for decades. What happens when the world&#x27;s governments decide to outdo each other on how much currency they can conjure into being?