SaturnV,"Near-money substitutes (ie; debt-denominated assets)...

SaturnV,

"Near-money substitutes (ie; debt-denominated assets) caused the credit bubble in the 1920's, just like now. There wasnt an explosion in the gold supply in the US in the 1920's to support all that speculation. The money came from credit issuance that wasnt backed by gold at all."

True, the Fed was taking on government debt so reserves increased far more than gold on deposit, resulting in more dollars issued than than there was gold backing them. One of the reasons FDR confiscated gold and introduced a pure fiat system for US citizens was because the gold backing was already in de facto default.

Rowingboat.