Republican and Conservative political analysis and commentary

Man are you way off base. You think the Great Depression was caused because the gold standard? Actually we haven't had a real gold standard since the FED was created in 1913. Even before that we didn't have a true gold standard for most of our history.
The gold era panics were caused by fractional reserve state banking policies and regulations. When depositors realized that their bank was cheating and in danger of bankruptcy and they didn't have the gold to back their all the deposits they ran to the back to redeem their paper certificates for gold.

You would think this should be an enlightened age, but no we still have a population engaged in myth. This is like listening to leftists who believe that the Great Depression was caused by evil capitalists and that FDR and his idiotic New Deal policies got the U.S. out of the Depression.

Take it from your FED friend Helicopter Ben Bernanke, the FED caused the crash of 1929 and along with stupid politicians made it into the Great Depression.

"I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again." - Ben Bernanke

http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/default.htm

Ron Paul is right, the artificial manipulation of interest rates (same thing as printing money) by the FED brings on the false prosperity of the business cycle and along with it malinvestment, big government spending and the like. All you have to do is look at the current bust of the housing bubble, the mortgage disaster and the federal deficit to see that it was caused by the easy money policies of the FED.
And Bernanke is ready to lower interest rates again and inflate in an attempt to stave off an inevitable recession or worse for a little while longer, and risk making inflation and the coming recession much worse.
And Fred Thompson who understands nothing about this even though he has lived through other economic boom and busts and has watched the dollar lose its value precipitously all his life is all for the FED doing it again?

Fair point, the Fed and Congress made what would have been a normal banking panic into Great Depression. I briefly forgot my economic history and stand corrected.

But the fact still remains that a banking panic was coming in 1929 right on cue; and the frictional banking policies you refer to were because dollars could be converted into gold - a staple of the gold standard.

The main point of convertibility of gold certificates into gold was a check on the ability of government to inflate the money supply beyond what was necessary during economic growth and to do that the government had to purchase gold and silver to mint species and to back the dollar.
The other point was to keep the banks honest.
Needless to say, it didn't work all the time, bankers throughout history have had a tendency to not be 100% transparent in their lending practices. It was greed and corruption that leads to panics, not the gold standard.
The events that led to the 1929 stock market crash was the easy money FED policies in the 1920's. They created a monster by manipulating interest rates below what a free market would have realized. Easy money policies encourage wild speculation in stocks and malinvestment in business. A crash was inevitable, just as inevitable as the more recent dotcom crash. The FED made a mistake by increasing interest rates and thereby contracting the money supply. They should have left things alone or decreased interest rates and let the market shake out the malinvestment.
The politicians irritated the problem further by stupid laws and interventions during the Hoover administration and FDR did further damage by outdoing Hoover in stupid laws and interventions.

The purpose of a hard money currency standard is to protect the purchasing power of the peoples money, that's why there was virtually no negative inflationary effects during the gold standard times excluding the Civil War period and its aftermath when the fiat money greenbacks were everywhere. An honest money standard is money that maintains its purchasing power or better yet increases it. Federal Reserve Notes do just the opposite for the common man and favor the government and special interests that benefit from it.
It is no surprise that precious metals like gold, silver and platinum have been bid up to record levels in terms of dollars. As Dr. Paul has pointed out it is not that commodities are worth more, it is because the market has realized the dollar is worth less.