Meaning: The quote refers to a significant event in economic history known as the Gold Reserve Act of 1934 in the United States. The act was passed during the Great Depression, and its purpose was to raise the price of gold in order to combat deflation and stimulate the economy. Garet Garrett, the journalist who made the statement, was known for his critical and insightful commentary on economic and political issues.

At the time, the United States was facing severe economic challenges, including high unemployment and a deflationary spiral. In an effort to address these issues, President Franklin D. Roosevelt signed the Gold Reserve Act into law on January 30, 1934. The act allowed the government to raise the official price of gold from $20.67 to $35 per ounce, effectively devaluing the U.S. dollar.

The act had several significant implications. By raising the price of gold, the government aimed to increase the value of the dollar and stimulate inflation. This move was also intended to provide relief to debtors, as higher prices would make it easier for them to repay their debts. Additionally, the devaluation of the dollar was expected to make U.S. exports more competitive on the global market, thus boosting economic activity and creating jobs.

However, the decision to raise the price of gold was controversial and had far-reaching consequences. As Garet Garrett's quote suggests, the deliberate devaluation of the dollar was a bold and unprecedented move that garnered attention and criticism from around the world. Some viewed it as a desperate measure, while others saw it as a bold and innovative approach to reviving the economy.

The quote also highlights the notion of a "fictitious price" for gold, emphasizing the artificial nature of the government's intervention in the gold market. The government was essentially setting a price for gold that did not reflect its true market value, leading to concerns about the manipulation of currency and the potential for unintended consequences.

In the years following the Gold Reserve Act, the U.S. economy did experience a period of recovery and expansion. The devaluation of the dollar helped to spur inflation and stimulate economic activity, contributing to a gradual improvement in the nation's financial conditions. However, the act also had long-term effects, including changes to the global monetary system and the role of gold in international finance.

Overall, the Gold Reserve Act of 1934 was a pivotal moment in U.S. economic history, representing a bold and controversial policy decision aimed at addressing the challenges of the Great Depression. Garet Garrett's quote captures the astonishment and intrigue surrounding this significant event, shedding light on the complexities and implications of government intervention in the economy.