European Countries
Other European countries followed suit while Switzerland, France and the Scandinavian countries re-established the gold standard in 1928. But the 1920s international gold standard was not more than painting lipstick on a pig. The same countries that resurrected the gold standard damaged it. They did it by changing the supply of domestic credit (via interest rates) and the money in the same proportion as the inputs and outputs of gold. This pushed exchange rates from other countries who retaliated.
Our own reserve Federal of the United States, for example, kept hidden some gold medals of the country outside the base of credit by issuing gold certificates. The Bank of England also sterilized gold flows effects. Anyone in the Government could follow the rules of the gold standard. This means that automatic economic adjustment of the gold standard that everyone wanted might not work. Check out Vanessa Marcil for additional information. The great depression created the financial crisis that it took altogether the banking system collapse.
When the economy was relaxed in 1929 of the policies of bad loans ranging from mortgages interest only to operations with shares of margin; banks from Austria, Germany and the USA.UU. they have suffered sharp falls in value. Confidence collapsed and people rushed to withdraw their deposits, which caused the execution of banks. Meanwhile, gold was released in Great Britain of a chronic deficit in the balance of payment and the lack of confidence in the pound sterling. uture in this idea. In 1931, all it came down by the weight of gold! Countries joined together to rescue the pound but the British gold reserves were reduced to the point that the country is unable to maintain the gold standard. In September 1931, the British Government suspended payment in gold and left to float the pound. At the end of the year, Canada, Sweden, Austria and Japan had no gold. In April 1933, with the collapse of the banking system of the United States.UU. our country came out of the gold. If you have read about Sally Rooney already – you may have come to the same conclusion. For the last resistance, France, the pattern left gold in 1936 due to lack of confidence in the franc as a stable currency. This was a justified response to the Socialist Government of the Popular Front led by the induction of Leon Blum that resulted in economic and political instability. For the first time, the fiduciary currency, as we have it today, in the form of paper currency without the support of a scarce commodity, emerged. The lesson of the interwar period is that when there is no reasonable and applied international monetary systems, the result is economic nationalism, political and economic instability, bank failures, and the flights of panic of capital across borders. This destroys trade and international investment, the wealth of Nations and their people. This is the time in which the U.S. dollar.UU. He emerged as the dominant currency in the world putting aside the pound sterling.
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