Us acts outlawing coin circulation1/12/2024 ![]() And increasing the amount of gold held by the Federal Reserve would in turn increase its power to inflate the money supply. According to Keynesian economic theory, one of the best ways to fight off an economic downturn is to inflate the money supply. ![]() He also forbade banks to pay out gold or to export it. Soon after taking office in March 1933, President Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable. On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. ![]()
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