Increased interest rates, determined by the Fed and adhered to by most banks, means less money is loaned into the economy and the resulting decrease in the supply of money means an overall contraction. Bankers and businessmen who knew of the planned contraction in advance had the option of selling their securities at top dollar before the action and then buying them back at rock bottom prices afterward. The same trick would be tried again in 1929. Between 1923 and 1929, the Fed allowed for an overabundance of credit and currency creation which resulted in intense speculation and an artificial boom with inflated currency. The loans and investments were subsequently foreclosed on by the banks and businesses and fortunes built on decks of cards were swept away.
Inflation is, simply put, an increase in the money supply above and beyond production.
Gold backed money has natural limitations in terms of this type of expansion and tends to keep decisions over that expansion out of the hands of the banking cartel, the Fed, and politicians in Congress who want to expand government programs without having to directly raise taxes. The American people have a right to expect that their dollar, which represents earnings and investment, is maintained at an objective and consistent level of value. This is impossible as long as the regulation of our money supply is in the hands of the banking monopoly and that they are granted the power to regulate the supply without concern for gold backing. The money they create is a mortgage on our future.