On the gold standard, the value of currency fluctuated wildly sometimes losing purchasing power by as much plus or minus 20% a year.
Since we got off the gold standard, monetary value has been pretty stable year to year.
On the gold standard, we were subject to periodic bouts of deflation and the “deflationary depressions” that accompanied them. We had severe depressions every 20 years or so.
Off the gold standard, we’ve only had one depression, the great depression of the 1930’s. The great recession of 2008 never turned into a depression, thanks to the flexibility that the federal reserve had by not being on the gold standard.
Yes but we have seem massive inflationary periods because we are told depressions, or lower prices, are a bad thing. I am all for honest money. The federal reserve and central banking is at the heart of dishonest money.
Yes, that’s true, but most of those were caused by fluctuations in value due to new discoveries of gold or silver that were occurring at the same time, since we were still in the age of colonization.
Most of the fluctuations in value of gold nowadays are due to speculators using it as a hedge against inflation of the fiat currencies, as industrial demand is pretty steady, and we do not find major deposits much anymore.
Well said.
The financial panics in the 19th century were due in large part to the failure to understand that wealth isn’t what’s piled up in Unka Scrooge’s basement.