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S5:E8 The Gold Standard and the Great Depression

S5:E8 The Gold Standard and the Great Depression

How the gold standard made the Great Depression much worse

The Great Depression. Some say that it was caused by a failure of the stock market. Well… that’s not all. Jacob Goldstein, host of NPR’s Planet Money podcast and author of “Money: the Truce Story of a Made-Up Thing” joins us to discuss the role the gold standard played in making the depression what it was.

A run on the bank

Here is why the gold standard made the Great Depression much worse. Simply put, the panic of 1929 caused people to run to the bank and demand their money back in the form of gold. We were on the gold standard back then and you could literally go to a bank and ask for them to get your money in gold. But banks were running out! There was only so much gold on hand because banks don’t generally keep 100% of their money in the vault. And banks (for the ease of our understanding things) “create” money when they do loans. So it was possible for a bank only to have a certain percentage of their loans backed by actual gold.

The Federal Reserve Raised Interest Rates

This created real trouble. If the banks ran out of gold, they’d go broke and have to close. So the Federal Reserve decided to raise interest rates. Raising interest rates gives people an incentive to leave their money in banks because then they get more interest. BUT it also made it harder for people to borrow money or refinance their existing loans. Which put a huge crimp on the American financial system. In order to keep gold in the banks, the Fed had to hobble the loan industry. That meant that businesses couldn’t get loans to help with payroll, and people looking to start a business couldn’t get the money they needed. And the economy froze.

That is why the gold standard was bad for the economy. Preserving it meant sacrificing the loan industry.

Helpful Sources:

S4:E18 Christmas and The Sermon on the Mount

S4:E18 Christmas and The Sermon on the Mount

How should Christians respond in a difficult year?

Christmas can be a difficult time for many of us. How do we love people who disagree with us? How do we cope with people who don’t seem to make sense anymore?

In this bonus Christmas message, I just want to remind all of us of Jesus’ command to both love our God AND love our neighbor.

How has 2021 been for you? Leave a comment on social media or on the website at God willing, season 5 of Truce will begin in winter 2022.

Merry Christmas,


Season Three Town Halls

Season Three Town Halls

Two chances to chat with Chris and meet other Truce listeners!

I’ll be hosting two free live town halls via Zoom. I hope you can join.

January 28 @ 9pm Eastern/6pm Pacific
February 2 @ 8pm Eastern/5pm Pacific


Gain access to the town halls by either joining the email list by signing up below (a link will be sent to your email once you do) or becoming a patron of the show via Patreon. If you are already an email subscriber, check your inbox!

Please note that these town halls will be recorded. By attending and speaking you are giving me the right to use your voice in a future episode.


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