I recently talked to a friend who questioned the importance of inflation. He mentioned that inflation could be helpful in the event of a major crisis. He specifically talked about natural disasters.

The Roaring Twenties were a period of economic prosperity and cultural change in the 1920s. They ended abruptly with the stock market crash of 1929. The following depression, known as the Great Depression, was the worst economic crisis in recent history.

The Great Inflation was a period of high inflation between 1965 and 1982. In 1980, year-over-year inflation reached nearly 14.5%. As a result of the high inflation, Federal Reserve chair Paul Volcker raised the target federal funds rate to 20%.

The Smithsonian Agreement was an attempt to reform the Bretton Woods system after president Nixon closed the gold window in 1971. The new agreement and reforms to the monetary system included devaluing the dollar against gold and adjusting the fixed exchange rates at which currencies were pegged to the US dollar.

The petrodollar system is an unofficial monetary system that started in 1974. As parst of the petrodollar system, most global oil exports are priced in US dollars. In return, the United States offers protection and cooperation to Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC).

Executive Order 6102 is an executive order that former president Franklin D. Roosevelt signed in 1933. It outlawed private gold ownership and ended the gold standard in the United States.[1] The American Presidency Project. “Executive Order 6102—Requiring Gold Coin, Gold Bullion and Gold Certificates to Be Delivered to the Government” Accessed Feb. 24,

The Nixon Shock is a series of policy changes implemented by former president Nixon in 1971. It consisted of closing the gold window, a 10% surcharge on imports and a 90-day wage price freeze.[1] The American Presidency Project: “Address to the Nation Outlining a New Economic Policy: “The Challenge of Peace.”” Accessed March 18, 2022.

The gold standard is a monetary system that pegs a country’s currency to physical gold at a fixed exchange rate. It was the predominant monetary system between 1870 and 1933. Under a gold standard, governments can’t inflate the money supply arbitrarily.

The Great Depression was a prolonged economic crisis that started with the stock market crash of 1929 and lasted almost a decade. The Great Depression was a deflationary depression during which prices of consumer products such as food and clothes decreased considerably. Asset prices of stocks, real estate and commodities dropped sharply as well.