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Friday, October 7, 2011

The Panic of 1893 - Part III

"...the U.S. Treasury began running through its gold supplies.  When a despairing Secretary of the Treasury confessed that the nation's gold reserves had plunged below the traditionally acceptable level of $100 million... panic spread.  It galloped pell-mell through the national marketplace, destroying illusions, toppling empires, and jamming the machinery that operated everyday life.  The forebodings of disaster had become prophecy.  Yet even as the country was sent reeling, there remained one economic certainty: gold.  Its value was sacrosanct.  Its worth held steady.  It was the one true thing.  So governments demanded it.  Investors hoarded it.  And prospectors went to great lengths to discover it."

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