A downward spiral develops: Rumors of further devaluations are constantly in the wind; the loss of confidence in other people’s money leads to a disinclination to do business across national borders; and international trade, upon which depend the food and shelter of hundreds of millions of people around the world, tends to decline. Just such a disaster followed the classic devaluation of all time, the departure of the pound from the old gold standard in 1931—an event that is still generally considered a major cause of the worldwide Depression of the thirties.
