by Alasdair MacLeod
Gold Money
The history of money and credit is that the separation of the two always ends in the destruction of credit. We appear to be edging close to that event again.
“While it is the duty of the citizen to support the state, it is not the duty of the state to support the citizen” – President Grover Cleveland (1885—1889)
The point President Cleveland made back in the 1880s was that individuals and vested interests had no rights to preferential treatment by a government elected to represent all. For if preference is given, it is always at the expense of others.
Those days are long gone, and the last president to take this stance was Calvin Coolidge in the 1920s, a whole century ago. He was followed by Herbert Hoover, who was very much an interventionist. As Coolidge reportedly said of his Vice-President, “That man has given me nothing but advice, and all of it bad”. Hoover was criticised for his disastrous intervention policies by Franklin Roosevelt, who succeeded in ousting him in the 1932 election, and then outdid him with even more intervention. The outflows of gold generated by accelerating government spending and the Fed’s monetary policies led to the suspension of gold convertibility for American citizens in 1933 and the devaluation of the dollar in 1934 from $20.67 to $35 per ounce of gold.