As had happened after previous major wars, the UK was returned to the gold standard in 1925, by a somewhat reluctant Winston Churchill. Although a higher gold price and significant inflation had followed the wartime suspension, Churchill followed tradition by resuming conversion payments at the pre-war gold price. For five years prior to 1925 the gold price was managed downward to the pre-war level, causing deflation throughout those countries of the British Empire and Commonwealth using the Pound Sterling. But the rise in demand for gold for conversion payments that followed the similar European resumptions from 1925 to 1928 meant a further rise in demand for gold relative to goods and therefore the need for a lower price of goods because of the fixed rate of conversion from money to goods. In order to attract gold, Britain needed to increase the value of investing in their domestic assets. They needed to increase the demand for the pound. By doing this, Britain attracted gold from the stronger US, which decreased the US money supply as well as depressed Britain’s own economy. Because of these price declines and predictable depressionary effects, the British government finally abandoned the standard September 20, 1931.
This went on for a long time, bank failures wiping out life savings, all sorts of scam, all sorts of social unrest in England, The Royalty got worried and passed the Bank Charter Act of 1844, which was the foundation of the modern regulatory system.
Banks were now required to hold back a percentage of their stored gold. Keep accurate book and receipts and it was from this point on we saw the emergence of legal tender ; Pound Sterling here in England, for example. One currency for all debts, public and private
"more energy supply means more production as well"A transfer of labour from manufacturing to running people into giant gerbil wheels would generate a net energy increase, but it sure wouldn't mean a net production increase.
"more energy supply means more production as well"
Credit expansion...is a process of redistribution, whereby the inflators, and the part of the economy selling to them, gain at the expense of those who come last in line in the spending process.... The valuations of the individuals making temporary gains and losses will differ. Therefore, each individual will react differently to his gains and losses and alter his relative spending patterns accordingly. Moreover, the new money will form a high ratio to the existing cash balance of some and a low ratio to that of others, and the result will be a variety of changes in spending patterns. Therefore, all prices will not have increased uniformly in the new equilibrium; the purchasing power of the monetary unit has fallen, but not equiproportionally over the entire array of exchange-values.
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