pam on Nostr: During the Great Depression era, the Gold Confiscation Act (Executive Order 6102) ...
During the Great Depression era, the Gold Confiscation Act (Executive Order 6102)
prevented people from owning more than 5 oz of gold. They were forced to exchange gold for paper money to strengthen the US dollar. Failing to do so can lead up to 10 yrs imprisonment (under the ‘Trading with the enemy Act / emergency banking Act)
What triggered it ? The economic downturn during this era led to people withdrawing money from the banks as there is no trust towards the banking system. They instead bought gold with it as safe keeping. Unfortunately this further reduced money circulation and slowed down the economy further
The confiscated gold was then used to increase the gold reserves (as the currency was backed by gold) , improve the banking system, and provide govt wider control
Shortly after the confiscation, FDR devalued the dollar by raising the price of gold from $20 to $35 per ounce (current price is $1,949). This devaluation is also known as the Gold Reserve Act of 1934, to help improve exports and promote local production (CPI - Cost Pull Inflation)
This act was eventually overturned after Nixon went with petrodollar, but unbacked paper dollars led to many other problems.
There are a few learnings to this
1. No governments can confiscate your Bitcoins
2. Money circulation is important and is needed with Bitcoin. Esp larger circulations such as import / export and buying / selling goods and services locally.
3. There is a higher chance of equal playing field globally with a singular native currency. There is no need to devalue etc to improve trade and economy
prevented people from owning more than 5 oz of gold. They were forced to exchange gold for paper money to strengthen the US dollar. Failing to do so can lead up to 10 yrs imprisonment (under the ‘Trading with the enemy Act / emergency banking Act)
What triggered it ? The economic downturn during this era led to people withdrawing money from the banks as there is no trust towards the banking system. They instead bought gold with it as safe keeping. Unfortunately this further reduced money circulation and slowed down the economy further
The confiscated gold was then used to increase the gold reserves (as the currency was backed by gold) , improve the banking system, and provide govt wider control
Shortly after the confiscation, FDR devalued the dollar by raising the price of gold from $20 to $35 per ounce (current price is $1,949). This devaluation is also known as the Gold Reserve Act of 1934, to help improve exports and promote local production (CPI - Cost Pull Inflation)
This act was eventually overturned after Nixon went with petrodollar, but unbacked paper dollars led to many other problems.
There are a few learnings to this
1. No governments can confiscate your Bitcoins
2. Money circulation is important and is needed with Bitcoin. Esp larger circulations such as import / export and buying / selling goods and services locally.
3. There is a higher chance of equal playing field globally with a singular native currency. There is no need to devalue etc to improve trade and economy