We went off the gold standard with the First Legal Tender Act in 1862. We didn't get back to it until after the war. All that inflation from 1862-64 was caused by the mass issue of what became known as the ‘greenback’ (which was fiat currency issued without backing)in order to finance a little dust-up mistakenly called the ‘Civil War’.
"We went off the gold standard with the First Legal Tender Act in 1862. We didn't get back to it until after the war. All that inflation from 1862-64 was caused by the mass issue of what became known as the ‘greenback’ (which was fiat currency issued without backing)in order to finance a little dust-up mistakenly called the ‘Civil War’."Okay, so even if we go to metal backed currencies, the civil war proves we can and will come off it in a crisis. So it's really not secure like it's been sold. Everyone who thought their dollars were backed by gold suddenly saw 78% inflation over three years, because we can come off it with a simple legislative act.
And of course the value of the dollar popped right back after the war right? Wrong. It would be 30 years before the CPI was back down to 8.54.
How about these other episodes of currency instability while on gold? Did we come off it these times too?
- 1802 -15.7% (Deflation)
- 1808 8.7% Inflation
- 1813 20.0% Inflation
- 1814 9,9% Inflation
- 1815 -12.3% Deflation
- 1816 -8.7% Deflation
- 1823 -10.7% Deflation
- 1843 -9.2% Deflation
- 1854 8.7% Inflation