AHC: An earlier end to the Gold Standard

[jerseyguy]

Is it plausible for a major world power to not go back to the gold standard after WW1, or to leave it during the 1920s?
This could make the Great Depression less disastrous and change the way that international trade and the web of debts between the western powers worked in the interwar period. Could a longer WW1 lead to a permanent end to the gold standard?

Background: The gold standard makes hyperinflation almost impossible because a country's money supply is constricted by the amount of its gold reserves, and it's much harder for governments to fund massive deficit spending (like during a major war). No country uses a gold standard today because it tends to produce deflationary spirals rather than the low but steady levels of inflation which is the goal of most central banks today.

Countries that left the gold standard in 1931 like Britain and the Scandinavian countries recovered from the depression sooner than places like Belgium and France that didn't go off the gold standard until 1935.

 

[Quintuplicate]

Well it would be unpopular for sure. Tons of people even today think the currency is based on a Gold Standard. There will still be gold and silver coins though, so that would comfort the people.

 

[Carl Schwamberger]

Well it would be unpopular for sure. ...

Indeed. Business and banking in 1920 were dominated by men who were unmovablly grounded in the latter 19th Century. Many adaptations were unpopular with that lot.

 

[New Hampshire]

You could have a less Ludendorff-dominated, stupid German High Command that rather than try to shoot for Paris does operation Michael and try to drive the British out of Flanders and across the Somme, which could result in a war that lasts several years longer than it did in our timeline. As a result, the financial system is even more destabilised and rather than try to fix their mess the state bankers remain on a fiat currency.