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A [[monetary system]] in which [[currency|currencies]] are defined in terms of a given weight of [[gold]]. The United States used the gold standard until [[Franklin Roosevelt]] confiscated all private holdings of gold and instituted 'fiat' currency, prolonging the Great Depression. Now, the Federal Reserve can, by federal statute, create money at will. The only limit is the statutory mandate to promote maximum employment, stable prices and moderate interest rates. How much money it creates and what tools it employs to create it are left entirely at the Fed's discretion. As a result, the growth and contraction of the money supply, economic growth, and inflation have been erratic, contributing to the current Depression.

A [[monetary system]] in which [[currency|currencies]] are defined in terms of a given weight of [[gold]]. The United States used the gold standard until [[Franklin Roosevelt]] confiscated all private holdings of gold and instituted 'fiat' currency, prolonging the Great Depression. Now, the Federal Reserve can, by federal statute, create money at will. The only limit is the statutory mandate to promote maximum employment, stable prices and moderate interest rates. How much money it creates and what tools it employs to create it are left entirely at the Fed's discretion.