gold standard policy fuckery

short explanation for anyone who hasn't studied it, there were massive arbitrage opportunites using gold. i can't remember the specific countries involved in the trade strategy, but the US and another country (the example i use is Britain but again, i studied this 20 years ago. some details are fuzzy) had their currency at a legally mandated fixed exchange rate. example out of my ass, 1 US dollar was tradable for 2 british pounds. Each country also had the exchange rate between gold and their currency fixed by legal mandate. One country changed their currency:precious metal exchange rate (i can't remember if they went from gold standard to silver standard or just changed the gold rate). Since their currencies were fixed in relation to each other, gold was cheaper in one country than the other by their own law. As a result, gold (and thus the backing for the currency supply) drained out of the US severely constricting the money supply, severely exacerbating any existing recession. And, since the prices were legal mandates and not responsive to market conditions, the arbitrage opportunity would only end when the law changed or the entire national economy collapsed.

what had the largest effect, between the Smoot-Hawley tariff bullshit, Hoover trying to balance the federal budget, gold standard fuckery causing severe constriction to the money supply, and all the many other causes, that's a matter of academic debate. I'm kind of a monetarist so i lean toward the gold standard shit, but like they fucked up every way imaginable short of deploying troops to invade your own country and waging war against your own citizens.

aw fuck.