H. Scott Trask sums it up: on the one hand, they believed in fractional-reserve banking, generally following Adam Smith's currency and banking theories. On the other hand, they were resolutely opposed to government-issued paper money, fiat money, legal tender laws, inconvertible paper currency, and land banks. On the question of a national bank, they were divided.
How are fiat money and the business cycle related? Without sound money, calculation is less efficient and the economy will be prone to business cycles. With sound money policy, no boom-bust cycle will emerge and monetary calculation and planning will be as efficient as possible in an uncertain world. John Cochran explains.
No other currency, national or international, can conceivably take the place of the American dollar. They all suffer seriously from the same ideological malady: they are the creation of political concern and authority. Whatever we may think of gold, it always looms in the background, beckoning to be used as money, as it has been since the dawn of civilization.
With the dollar down and gold up, both trends obviously related to growing fear of economic troubles ahead, the question again arises: why shouldn't the dollar itself be good as gold? It would be if the views of the classical-liberal tradition held sway. This tradition stands solidly behind a commodity money standard, like silver or gold, as the very definition of sound money.
What is essential for us today is to continue the research, the writing, the advocacy for sound money, for a dollar that is as good as gold, for a monetary system that is separate from the state. It is a beautiful vision indeed, writes Lew Rockwell, one in which the people and not the government and its connected interest groups maintain control of their money and its safe keeping.
The present unstable financial system cannot be fixed by means of a monetary policy that targets the price of gold, argues Frank Shostak. This framework, favored by supply-siders, is likely to further destabilize the economy. What is needed is not a reversion to the bankrupt Bretton Woods system, but a genuine gold standard, where gold is money.
What set in motion the explosive technological advance of the last 250 years was the world of ideas. Great thinkers began to understand the internal logic of the market economy and its potential for liberating mankind from poverty, dependency, and despotic rule.
Gold is the antidote to inflationary money. Gold, its advocates have said through the centuries, protects an individual against the damage caused by the disease called inflation that is created by central banks. Gregory Bresiger reviews Peter Bernstein's attempt to debunk: The Power of Gold: History of an Obsession.
Jack Kemp writes in favor of the gold standard. But will his plan bring sound money? Steve Piraino says no.
Greenspan has lowered rates again, but he can't know if he has done the right thing. Under the far-superior gold standard, such questions never came up. Lawrence Reed explains.
