gold, page-104847

"There's plenty of other research and opinion from experts who have studied it in depth suggesting it was a confluence of ..."

Indeed that seems to be the case, but undoubtedly that the gold standard played a large part. And bellow is something that can illustrate this point.

Extract from the world gold council.

How the Gold Standard workedUnder the Gold Standard, a country’s money supply was linked to gold. The necessity of being able to convert fiat money into gold on demand strictly limited the amount of fiat money in circulation to a multiple of the central banks’ gold reserves. Most countries had legal minimum ratios of gold to notes/currency issued or other similar limits. International balance of payments differences were settled in gold. Countries with a balance of payments surplus would receive gold inflows, while countries in deficit would experience an outflow of gold.In theory, international settlement in gold meant that the international monetary system based on the Gold Standard was self-correcting. Namely, a country running a balance of payments deficit would experience an outflow of gold, a reduction in money supply, a decline in the domestic price level, a rise in competitiveness and, therefore, a correction in the balance of payments deficit. The reverse would be true for countries with a balance of payments surplus. This was the so called ‘price-specie flow mechanism’ set out by 18th century philosopher and economist David Hume.This was the underlying principle of how the Gold Standard operated, although in practice it was more complex. The adjustment process could be accelerated by central bank operations. The main tool was the discount rate (the rate at which the central bank would lend money to commercial banks or financial institutions) which would in turn influence market interest rates. A rise in interest rates would speed up the adjustment process through two channels. First, it would make borrowing more expensive, reducing investment spending and domestic demand, which in turn would put downward pressure on domestic prices, enhancing competitiveness and stimulating exports. Second, higher interest rates would attract money from abroad, improving the capital account of the balance of payments. A fall in interest rates would have the opposite effect. The central bank could also directly affect the amount of money in circulation by buying or selling domestic assets though this required deep financial markets and so was only done to a significant extent in the UK and, latterly, in Germany.

So, you want gold in ? Then increase interest rates.

Trying Tto Make Sense of the Insane Policy of the Bank of France and Other Catastrophes

Published June 18, 2015

Bank of France , Cassel , counter-insurgency , Earl Thompson , gold standard , Great Depression , Hawtrey

18 Comments

Tags: Barack Obama, Dick Cheney, Donald Rumsfeld, Erich Shinseki, George Bush, Paul Wolfowitz

In the almost four years since I started
blogging I have occasionally referred to the insane Bank of France or
to the insane policy of the Bank of France, a mental disorder that
helped cause the deflation that produced the Great Depression. The
insane policy began in 1928 when the Bank of France began converting its
rapidly growing stockpile of foreign-exchange reserves (i.e., dollar-
or sterling-denominated financial instruments) into gold. The conversion
of foreign exchange was precipitated by the enactment of a law
restoring the legal convertibility of the franc into gold and requiring
the Bank of France to hold gold reserves equal to at least 35% of its
outstanding banknotes. The law induced a massive inflow of gold into the
Bank of France, and, after the Federal Reserve recklessly tightened its
policy in an attempt to stamp out stock speculation on Wall Street,
thereby inducing an inflow of gold into the US, the one-two punch
knocked the world economy into just the deflationary tailspin that
Hawtrey and Cassel, had warned would result if the postwar restoration
of the gold standard were not managed so as to minimize the increase in
the monetary demand for gold.