Economics Questions

Re: "Helping Britain" in Rothbard's "America's Great Depression"

yessir — Tue, 02 Feb 2010 02:47:37 GMT

Matthew Toth:

Ok so I think I understand why Britain was losing gold. Can you explain the relationship between the prices in Britain and returning to gold at the higher value? and how did the fact the Britain inflated their money supply offset the loss of gold?

Do you mean the fact that US inflated their money supply?

Re: "Helping Britain" in Rothbard's "America's Great Depression"

Matthew Toth — Mon, 18 Jan 2010 02:59:34 GMT

Ok so I think I understand why Britain was losing gold. Can you explain the relationship between the prices in Britain and returning to gold at the higher value? and how did the fact the Britain inflated their money supply offset the loss of gold?

Re: "Helping Britain" in Rothbard's "America's Great Depression"

Knight_of_BAAWA — Tue, 05 Jan 2010 01:00:30 GMT

Matthew Toth:
So essentially people were protecting themselves by exchanging the inflated pounds for gold which holds it's value better?

There's that aspect of it, yes. And with so many pound-notes to be redeemed without enough gold backing, the UK was bleeding gold.

As to your second question: the fed created a bubble by inflating the currency, thus lowering our purchase power. I think there were also loans to the UK.

Re: "Helping Britain" in Rothbard's "America's Great Depression"

Matthew Toth — Mon, 04 Jan 2010 00:50:02 GMT

How did inflation of the American money prevent Britain from losing more gold to the US? BTW , thank you very much for the quick reply!

Matt

Re: "Helping Britain" in Rothbard's "America's Great Depression"

Matthew Toth — Mon, 04 Jan 2010 00:47:06 GMT

So essentially people were protecting themselves by exchanging the inflated pounds for gold which holds it's value better?

Re: "Helping Britain" in Rothbard's "America's Great Depression"

Knight_of_BAAWA — Mon, 04 Jan 2010 00:14:59 GMT

People could use the inflated pounds to exchange for gold, which was worth more than what the pounds said. And the UK lost a lot of gold because there were so many pounds coming in to exchange vs what they actually had. The fed was actually trying to bail out the UK central bank, which helped cause the GD.

"Helping Britain" in Rothbard's "America's Great Depression"

Matthew Toth — Sun, 03 Jan 2010 23:37:42 GMT

I have a queston regarding Britain's return to the gold standard in 1925. I understand that to return to the 4.87 "prewar" price that Britain's money supply and prices would have to deflate however I don't understand how Britain essentially lost gold to the US when they went back the that price without the deflation, as Rothabrd points out. Can anyone explain this to me? I'm not an economics student but have been trying to educate myself and any help is greatly appreciated

Thanks

Matt