Out of all of the readings for this week I found the Common-Place posting the most interesting and the on that I decide to make the focus of my blog this week. In reading this posting I thought that this unusual form of chrometophobia was key for me to more fully understand the discussion we had two weeks ago when we talked about the resistance to leave the gold standard in Liaquat’s The Lords of Finance. The reason why this week’s reading was beneficial, was because it filled in some holes left by Liaquat.
Liaquat asserted, for example that one reason that there was a general fear of leaving he gold standard behind was because there were still many precious metallic coins in circulation. In fact it was stated that over forty percent of the transactions that occurred in the United States in 1912 were with these coins. The gold standard was tangible, safe and a device which had been used to successfully keep inflation in check. That seemed logical but the amount of fear that was felt about dismissing the gold standard seemed out of balance with the reasoning given by Liaquat.
The possible reason that I felt a little uncomfortable with Liaquat’s explanation might be because it was incomplete. According to O’Malley, there were intense psychological reasons, that had nothing to do with economics, that added to their fear of discontinuing the gold standard. O’Malley made it sound as though they people in the late 1800s/early 1900s thought that if the no longer used the gold standard the social fabric of their lives would be ripped to shreds, particularly the father’s inability to provide for his family and the United States slipping in international morality. When added with Liaquat’s reasoning, O’Malley’s article put the gold standard crisis in a more clear perspective from someone looking through 20th century lenses.
I was curious what would come up if I Google search “fear of paper money”. While quite a few sites came up about how to deal with irrational fears, one site was particularly interesting and relevant to what we have been discussing in class and although this is not a class in British economic history, it does show how people who are in tough economic times still tend to gravitate to gold to ease their fears. Even now, after the gold standard has been eliminated, we are still using gold as an economic security blanket. If you are interested in reading more about how the British are looking to gold as their safety net I have provided the site below.
http://www.thisismoney.co.uk/investing/article.html?in_article_id=491220&in_page_id=166
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