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The History of Money

Dan Snow's History Hit

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The Gold Standard and the Great Depression

Much of the world was on the gold standard until the great depression, right? I mean, the bank of england was, in fact, on the goldstandard in the first part of the twentieth century. And it basically worked that way, like ordinary people could go and trade in paper money for gold during times of panic. That proved to be a problem in the depression, because falling prices were driving the depression. They were causing people in debt to have lower wages, which made them unable to pay their debts. So going off the gold standar stopped the fall in prices, allowed governments to print more money,. And forever after, gave governments a more complete control over money.

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