International Cooperation to Support the Gold Standard Is the Maintenance of a Cheap Money Policy without Suffering the Loss of Gold

Thus, the close international Central Bank collaboration of the 1920s created a false era of seemingly sound prosperity, masking a dangerous worldwide inflation. As Dr. Palyi has declared, "The gld standard of the New Era was managed enough to permit the artificial lengthening and bolstering of the boom, but it was also automatic enough to make inevitable the eventual failure." The pre-war standard, Palyi points out, had been autonomous; the new gold standard was based on the political cooperation of central banks, which "impatiently fostered a volume of credit flow without regard to its economic results." And Dr. Hardy justly concluded, "International cooperation to support the gold standard . . . is the maintenance of a cheap money policy without suffering the loss of gold."

--Murray N. Rothbard, America's Great Depression, 5th ed. (Auburn, AL: Ludwig von Mises Institute, 2000), 149.