5. General Considerations on Inflation
General Considerations on Inflation
1. THE ORIGIN AND NATURE OF INFLATION
So far we have presented the operation of a natural monetary system of competing commodity monies. We have also argued that there is no utilitarian rationale for intervening into the market process and altering the money supplies through political means.
6. Private Inflation: Counterfeiting Money Certificates
Private Inflation: Counterfeiting Money Certificates
1. DEBASEMENT
Before the age of banking, debasement had been the standard form of inflation. Debasement is a special way of altering coins made out of precious metal. To debase a coin can mean either one of two things: (a) to reduce its content of fine metal without changing the imprint; and (b) to imprint a higher nominal figure on a given coin.
7. Enters the State: Fiat Inflation through Legal Privileges
8. Legalized Falsifications
9. Legal Monopolies
10. Legal-Tender Laws
Legal-Tender Laws
1. FIAT EQUIVALENCE AND GRESHAM’S LAW
A legal tender is money or a money certificate that may be used to make payments against the will of one of the exchange partners. Thus the law overrides private contract and provides that the legal tender shall be accepted as payment, rather than the money (or money certificate) promised to the seller or creditor.
11. Legalized Suspensions of Payments
Legalized Suspensions of Payments
1. THE SOCIAL FUNCTION OF BANKRUPTCY
The fundamental problem of fractional-reserve money tokens is redemption. If a sufficiently large number of the customers choose to demand redemption at the same time, the issuer cannot possibly comply. He goes bankrupt.
12. Paper Money
13. The Cultural and Spiritual Legacy of Fiat Inflation
Part 3: Monetary Order and Monetary Systems
