Gold Standard

From Part IV of A History of Money and Banking in the United States: The Colonial Era to World War II: “The Gold-Exchange Standard i

Announcing that 50 million Americans are uninsured means nothing.

Fiat money — or, to be more precise, its production — is already a violation of the free-market principle; and fractional-reserve banking amounts to leveraging the economic consequences of fiat money. Austrians favor a money that is freely chosen and operates by market principles.

Bernanke assured the national audience that the Fed was not printing money; however, he didn't explain where the Fed was going to get the funds to buy $600 billion worth of treasuries.

More and more journalists and economists are calling for a return to "sound money." Joseph Salerno's new book provides a rigorous examination of what sound money really means.

The principle of sound money consists in affirming the market's ability to choose and maintain money (and the enormous benefits this has provided to society) and also in opposing any government meddling in money.

Gold in the money survived all the way to Nixon, and it was he who finally drove the stake in once and for all. That was supposed to be the end of it, and the beginning of the glorious new age of paper prosperity.

A pure gold standard is not conducive to business cycles. Contrary to mainstream economists, it is the attempts of the central banks to bring about price stability and full employment that set in motion the menace of boom-bust cycles.

The economist should not allow his readers to accept the current myth that inflation is a scourge that governments try, with varying success, to keep in check. This myth is one of the consequences of economists generally failing to make explicit their assumptions.