On Nov 8, 2008, at 11:11 AM, B. wrote:
> I came across this:--
>
>
> "Before the election of Franklin D. Roosevelt in 1932, gold coins
> had circulated freely in the United States as legal money, and gold
> bullion was owned by banks and other private entities. *In early
> 1933, as part of the New Deal, the U.S. Congress enacted a package
> of laws which removed gold from circulation as money, and which made
> private ownership of gold in the U.S. (except for coins in
> collections or jewelry such as wedding rings) illegal.* All gold in
> circulation was seized by the government in exchange for dollars at
> the fixed rate of $20.67 per ounce. Owners of gold bullion in the
> U.S. were also required to trade it for other forms of money. All of
> this left the government of the United States with a large amount of
> gold metal, and no place to store it."
>
>
> From: http://en.wikipedia.org/wiki/United_States_Bullion_Depository
>
>
> Apparently it wasn't until Gerald Ford that this policy was reversed?
>
> What was the New Deal economic logic behind making private ownership
> of gold illegal, and asking folks to hand it over to the govt. at a
> fixed exchange rate?
Pure quantity-theory monetarism. By depreciating the nominal value of the dollar from ~.05oz. to ~.03oz. they hoped to start an inflationary cycle to counteract the deflation that they held responsible for the general crisis of the capitalist system.
Shane Mage
> This cosmos did none of gods or men make, but it
> always was and is and shall be: an everlasting fire,
> kindling in measures and going out in measures."
>
> Herakleitos of Ephesos