# Trump to put nut on fed reserve board **URL:** \ **Category:** Politics & Elections\ **Created:** [November 16, 2020, 8:48pm UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738 "2020-11-16T20:48:50Z")\ **Posts on this page:** 2\ **Page:** 7
**Author:** ![etasyde](https://avatars.discourse-cdn.com/v4/letter/e/9f8e36/32.png) [@etasyde](https://boards.straightdope.com/u/etasyde)\ **Post date:** [December 5, 2020, 4:06am UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/121 "2020-12-05T04:06:36Z")
> [@Deeg](#): > > Sure it did: Russia’s military collapsed and Austria-Hungary was close. Germany’s surrender was more complicated but it wasn’t due to lack of gold This is not a detailed analysis of the **economic** situation of those countries. > [@Deeg](#): > > Let me ask you this: what country lost a war due to their allegiance to the gold standard? You are misunderstanding the basic sequence of events. Under a gold standard, if you try to undergo a major war, you go bankrupt during said war or immediately afterwards. Virtually **all** of the countries you keep referencing _did exactly that_. I would argue that _no_ society to date has ever managed to produce a sufficiently large surplus of productivity to support a major war. They’re ruinously expensive! And the deficit required will manifest itself either over a long period of time, as we see with most fiat currencies, or almost immediately as with a gold standard. Now sure, a gold standard doesn’t prevent a country from doing stupid things. Again, it ensures stark consequences _for_ doing stupid things. And not “some ambiguous time down the line, when our great great grandkids have to deal with it.” Soon. Soon enough to _matter_ to the people making the decisions. Wiser heads observe this and try to avoid doing said stupid things, but if for whatever reason a nation decides to embark on a particularly stupid endeavor, they get slapped with massive consequences. _In the short run_. There is no panacaea against stupidity. A gold standard just reduces the time it takes for consequences to be faced (and the subsequent impact of those consequences). Remember, if you’re an American, your tax dollars _today_ are still paying for the Vietnam war. We’ve kept current on the interest payments on the debt, but never actually _paid down_ and retired any of it. When the principle comes due on one bond, we take out a new bond to cover the old. In a vacuum, we could keep doing that forever because our interest payments aren’t coming out of an ever depleting gold stockpile, they’re coming out of money supply expansion. I mean, we now owe more money than the total M3 money supply and we’re not bankrupt. And just so you don’t feel I’m dodging your question (which was asked without answering mine), you should check out the **economic** situation the countries that surrendered were facing. Lack of gold (rather, purchasing power, because the _specific_ unit of account doesn’t matter as long as it can’t be materialized easily) is almost always the root cause of the collapse. Can’t afford your logistical requirements? Your army collapses, or you ration and confiscate from the populace and _they_ collapse into starvation (Germany) or open rebellion (Russia) **until** your army then collapses. Abandon the gold standard so you have infinite money with which to afford these things? The people’s purchasing power rapidly evaporates, they can’t buy food, and they again collapse into starvation or rebellion. WW1 was largely a race against economic collapse, which Russia, Austria and Germany most definitely lost. Unfortunately, history books only talk about the pew pew side of war, so much of the horror experienced by the _civilian_ population is completely under the radar. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [December 6, 2020, 4:02am UTC](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738/122 "2020-12-06T04:02:44Z")
This is just wrong. There are more than a few examples of governments waging an expensive war that didn’t go bankrupt, even countries on the gold standard. The US Union government after the Civil War not only paid off their debt but helped reconstruct the South. The UK during the 19th century–the gold standard (heh) of the gold standard–was in an almost [constant state of war](https://en.wikipedia.org/wiki/Timeline_of_the_British_Army_1800%E2%80%931899). And then there’s WW I. Most (all?) of the European powers were on the gold standard; if there was ever a time for the gold standard to limit a war that was it. Instead we got the most ruinous and deadly war the world had ever seen. Germany didn’t surrender because they ran out of money (although they were heavily in debt like everyone else). They had lost 2 million men and the US was starting to enter the war; the virtual military collapse of Austria-Hungary left them alone against three powers. It was over. After the war Germany might have recovered economically if it hadn’t been for the reparations. Losing a major war is ruinous, gold standard or no. A gold standard has its advantages but preventing or limiting a war is not one of them. [Previous page](https://boards.straightdope.com/t/trump-to-put-nut-on-fed-reserve-board/925738.md?page=6)