Going back to the 1930's?

In the 1930’s there was a fall in the money supply

In September 2023 M2 declined in line with the decline in the 1930’s, down 3.6% in September 2023:

Military spending will no doubt make up the shortfall.

Still, my gold and silver are going up nicely :slight_smile:

1 Like

Bitcoin is doing much better than Gold. :grin:



IIRC, government policy then was not counter-cyclical. A smaller economy? Then not as much money is needed. Shrink the money supply!


1 Like

Our financial system does not have much in common with the 1930s.
For that matter, neither does the basis of our economy.

Not sure there are any lessons to learn here or any actionable ideas…


…but when the lights go out, I’ll still have my precious metals :slight_smile:


Until you don’t (spent, used, stolen, misplaced, lost, whatever).

…and this is what so interesting about economics.

However, in the 1930’s and more recently, gold was in demand by central banks:


Eons ago, I watched a piece about how the depression spread from the US to Europe. The piece presented it as a function of everyone being on the gold standard. As Europeans continued to buy US goods, they essentially paid in gold. The outflow of gold required a reduction in the amount of money in circulation, causing a depression.


^ That’s one of the reasons the gold standard was dumped. If the money supply is decreasing central banks can create more simply by cutting interest rates. If you are the gold standard you are just stuck.


Agreed, but the gold standard did provide some kind of stability. The alternative is endless printing of currency and the problems that that brings.

1 Like

What evidence is there that there was more stability during the period under the gold standard?


Sure, like tying your rudder and lines in place does on a ship. Really good idea if you are really convinced of stable weather and you need to catch some sleep and set you alarm to awake and check things out regularly. Really stupid otherwise because that kind of

Stability = Catastrophe

when you are in a dynamic situation. And few things are more dynamic than a modern world economy.

david fb


When the lights go out I think your metal will be the least of your worries. :smile:



It’s beginning to sound a lot like Smeagol
Everywhere you go
Take a look at the five and ten, it’s glistening once again
With bullion bars and silver coins that glow…



More like this:



And to each his own, said the man as he kissed the cow…

My equivalent tokens for security are my solar panels and home battery, abundant well water, huge nopal cactus grove, neighbors who farm maiz chilies squash and swap them for the fruits from my nopales, and the goat and sheep herder who makes delicious rural cheese…

Watching the skies for portents, ooops, I mean the internet.

david fb


Demand-side economics is the best of worlds for the US.

1 Like

This is what happens when a major currency is not ‘anchored’ to anything:

A seemingly unrelenting wave of debt is piling onto America’s balance sheet.

Gold almost $2,000 an ounce

That is an assumption that the currency is unanchored. The USD is anchored to the GDP. The GDP in other words backs the USD.

But what is GDP? These days it is just the sum of currency and credit which doesn’t reflect economic progress. More dollars = rise in GDP. You can’t measure economic progress with statistics anymore (if you ever could).