Economic Evolution: Darwin's Idiot Speaks

Part 5 of 6

FDR had abolished private ownership of gold money but retained gold as the underlying asset for U.S. currency, exchangeable one for the other.  Variations in the price of U.S. currency in ounces of gold served government’s desires in manipulating trade.  Note as Patrick Barron has written in summarizing Alasdair Macleod’s work, “gold is money and state fiat currencies are credit”.  This means that “money (gold) has no price.  Fiat currencies have a price, i.e., a certain weight of gold.”.    The exchange feature, gold on demand for currency, was abolished as national reserves shrank in the face of ever-expanding supplies of fiat currency and other forms of “created” money in the development of new financial instruments, still tied to real assets, by the private and public markets.  Indeed, although the U.S.A. held the gold reserves of many foreign nations, moving amounts of this gold from one country’s store to another to satisfy changes in international trade, France became concerned…