Gold Can’t Be Downgraded and It’s No One’s Liability

“We have gold because we cannot trust governments,” President Herbert Hoover

It’s not often I get to quote the much-maligned Herbert Hoover. This quote, made in 1933, was another piece of Hoover’s advice that incoming President Roosevelt ignored. Shortly thereafter, Roosevelt passed the Emergency Banking Act, which forced all Americans to convert their gold coins, bullion, and certificates into US dollars. Then he immediately devalued the US dollar. Desperate to cure deflation, Roosevelt, as we know, tried manifold pro-inflation tactics. Was currency devaluation successful? Economists are still debating it.