Tuesday, June 03, 2008

Scary parallels with the 1930s

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Paul Krugman: A return of 'That 70s Show'?

By Paul Krugman -

Tuesday, June 3, 2008
Story appeared in EDITORIALS section, Page B7
Which decade is it, anyway? Not long ago it seemed as if everyone watching the carnage in financial markets was drawing scary parallels with the 1930s....The emerging conventional wisdom, if what I heard is any indication, is that Bernanke has been fighting the wrong enemy all along: Inflation, not financial collapse, is the real threat. And to head off that threat, the critics say, the Fed has to reverse course and raise interest rates – never mind the risks of recession-----

Tuesday, June 3, 2008


Roosevelt knew that if he abolished the Gold Standard the only way he could keep the dollar stable abroad (since foreign countries don't have faith in other country's currency) was to guarantee foreign payment for dollars in gold! So when he decided to take us off the Gold Standard, he made an agreement with foreign countries, promising to keep the dollar stable so it wouldn't take a nosedive. He made an agreement with the foreign countries that he would set the price of gold at Fort Knox at $35.00 per ounce, and he guaranteed the foreign governments that they could exchange their dollars any time they wanted to, for a guaranteed $35.00 an ounce in gold. This allayed their fears that they better dump their dollars or they would be worth nothing. In exchange for this guarantee, they agreed to set their currency at a fixed price--for example, the British Pound was set at approximately $2.40 per Pound.
Ted Rudow III,MA

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