[justshutupandtakeit]

No this was the attempt to return the U.S. to a gold standard which destroyed the greenbacks and shrank the money supply. Loans taken out by farmers in 1870 became unrepayable when the money supply shrank and prices fell as a result. If your loan is at a 5% interest rate and the return to gold causes prices to fall by 5% a yr. your "real" interest rate is doubled while the prices of farm products collapse destroying the revenue stream to repay them.

It was these problems which provoked the farmers to demand a central bank to remove monetary control from the hands of the eastern money center banks. Bankers resisted any idea of a central bank until the Panic of 1907 made them realize that there wouldn't always be a J.P Morgan available with the ability to stop a panic and its runs on banks.

Review U.S. history from 1875 to 1900 to get a clear idea of what happened here.

[#3Fan]

No this was the attempt to return the U.S. to a gold standard which destroyed the greenbacks and shrank the money supply. Loans taken out by farmers in 1870 became unrepayable when the money supply shrank and prices fell as a result.

So what was their excuse in the 80s when there was all that farm-aid going on?

If your loan is at a 5% interest rate and the return to gold causes prices to fall by 5% a yr. your "real" interest rate is doubled while the prices of farm products collapse destroying the revenue stream to repay them.

Deflation was 5% a year? Prove it. Even if it was, inflation was 12% a year in 1979, so inflation and deflation are not immune to fiat money, obviously.

It was these problems which provoked the farmers to demand a central bank to remove monetary control from the hands of the eastern money center banks. Bankers resisted any idea of a central bank until the Panic of 1907 made them realize that there wouldn't always be a J.P Morgan available with the ability to stop a panic and its runs on banks.

I think the FDIC program had more to do with stopping runs than going to fiat. (And now JP Morgan has $23.4 trillion dollars worth of derivatives ready to explode ant any time. The saviour becomes the destructor.)

Review U.S. history from 1875 to 1900 to get a clear idea of what happened here.

Like I said fiat is more manipulatable and that is an advantage as long as we have a decent driver. It becomes a disadvantage when we get a bad driver. What are the odds of getting a bad driver? The country elected Clinton twice, another Clinton may put someone like a Rubin in charge. Then it's bye bye currency, hello Germany 1923.