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Even during gold standard, fed held only 40% of goldwww.federalreservehistory.org/essays/roosevelts-gold-program
181 sats \ 2 comments \ @standardcrypto 22 Oct bitcoin
"The United States had been on a de facto gold standard since the 1830s and de jure gold standard since 1900. In 1913 the gold standard was built into the framework of the Federal Reserve. The law required the Federal Reserve to hold gold equal to 40 percent of the value of the currency it issued (technically termed the Federal Reserve Note but colloquially called the dollar) and to convert those dollars into gold at a fixed price of $20.67 per ounce of pure gold."
Imho, this virtually guaranteed an eventual bank run. Only the fact that gold is inconvenient to transact in allowed the fed to get away with partial backing from 1913 to the eventual EO6102 confiscation order in 1933.
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49 sats \ 0 replies \ @denlillaapan 22 Oct
nah, fractional reserve banking on gold operated for hundreds of years. 40% is pretty high (and often some liquid -- i.e., easily salable -- assets on top of that). The bank runs during the GD -- or even the semi-going-off GS during WWI -- weren't related to the coverage ratio specifically
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0 sats \ 0 replies \ @7e6e393a56 22 Oct
The US has some skeletons in its closet. Roosevelt issued the Executive Order, which established two strikes for citizens. The first of these scams was to completely ban individual possession of gold, whether at home or in banks. Now, Americans could only use the dollar. The second blow was that, in addition to the ban on gold ownership, the government forced people to hand over all the gold they owned to the central bank (Fed). The dollars that Americans received in exchange for their gold lost 60% of their value in just under a year. Because it has the largest gold reserve in the world, culminating in the Bretton-Woods agreement in 1944, the dollar was adopted as the standard currency
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