[lbo-talk] Question to list about FDR's monetary policy

Shane Mage shmage at pipeline.com
Sat Nov 8 13:32:41 PST 2008


On Nov 8, 2008, at 11:43 AM, Doug Henwood wrote:


>
> On Nov 8, 2008, at 11:11 AM, B. wrote:
>
>> 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?
>
> They wanted to drive a stake through the heart of the gold standard.

Baruch? Moley? The fact is that the US $ devaluation was, in part, a mercantilist/protectionist measure designed to keep the US on the gold standard by taking over the public's gold holdings to bolster the country's international reserves. The stake was sharpened and driven in 1971, and by Nixon--no new dealer he! But without any doubt the main motivation for the 1933 devaluation was purely monetarist: to counter the general crisis of the capitalist system with a big dose of inflation.

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



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