PMs: France Gold hoarding Caused The Great Depression

[clb09]

*Sorry if this is a repost. Could not find this story in this RPF sub-forum.*

http://af.reuters.com/article/worldNews/idAFTRE69S1MU20101029

France increased its share of world gold reserves from 7 percent to 27 percent between 1927 and 1932 and effectively "sterilised" it so as not to have a negative impact domestically.

Major currencies at the time were backed by gold under the Gold Standard system, so the move had the effect of creating an artificial shortage of reserves, putting other countries under enormous deflationary pressure.

 

[hugolp]

The myth that never dies.