Money and Banking

This is old-fashioned redistribution, to sustain the unsustainable.

Modern monetary theory takes up the thread of the traditional quantity theory as far as it starts from the cognition that changes in the purchasing power of money must be dealt with according to the principles applied to all other market phenomena and that there exists a connection between the changes in the demand for and supply of money on the one hand and those of purchasing power on the other.

Recorded at the Mises Circle in Greenville, South Carolina, 3 October 2009.

"Inflation worked as a tax on those further removed from government spending."

The excellence of the gold standard is to be seen in the fact that it makes the monetary unit's purchasing power independent of the arbitrary and vacillating policies of governments, political parties, and pressure groups.

Recorded at the Mises Circle in Seattle, September 12th, 2009. Sponsored by James M. Wolfe.

Printing green pieces of paper doesn't make an economy richer. If done without restraint, it leads to runaway price inflation. As an added downside, it also allows governments to slaughter millions of people. (The world wars could not have been waged if the belligerents had stuck to the gold standard.)

Rothbard has in addition a carefully worked out theory, Austrian economics, to guide him.

In the period from 1913 to 2007, the Fed — implementing its mission to "stabilize the price level" — destroyed over 97 percent of the purchasing power of the dollar. (For comparison's sake, note that the value of the dollar had increased slightly during the 100 years before the Fed was created.)

Central bank's and government's loose monetary and fiscal policies are instrumental in the weakening of the process of real savings formation through the diversion of real savings from wealth generators to non-wealth-generating activities.