Monetary Theory

Government-controlled fiat money is fraudulent money.

In contrast, throughout its previous 150 or so years, the American economy had managed to do just fine without the Federal Reserve "fine tuning" the money supply.

Economic depression is good for the state. Even if the state knew how to end it, why would we suppose that it has the incentive to do so?

The government can prevent market forces from operating by channeling resources into artificial channels.

The reason for this is that all production, including any new and additional production called into being by stimulus packages, itself entails consumption. And this consumption tends at the very least to approximate the fresh production and, indeed, is capable of equaling or even exceeding it.

"By far the biggest fallacy is the belief that a growing economy requires a growing money supply."

"Let's go back to using real money."

Guido Hülsmann offers his conclusions: the current monetary institutions (central banks, paper money, and fractional-reserve banking) cannot be justified and should be abolished; such an act should be greeted as a restoration of monetary sanity and a humane economy.

"If buying stuff is the way to promote recovery, then nobody can top the DC politicians."

The present crisis is not a crisis of capitalism but a crisis of state interventionism, and it is also a consequence of a mechanicist approach to economic problems.