Fergusson presents a compelling argument that the central bankers of Europe did not believe that the quantity of money had anything to do with the price level. And I suppose you think that our modern Fed rulers understand at least this much.
When the state spends more money than it receives in taxes — a fact indelibly written into the bond — it is deliberately committing an act of bankr
Hoover's interventionist policies focused on labor markets with the goal of keeping wages and employment high. Bush's interventionist policies focused on capital markets with the goal of keeping financial markets functioning.
The strength of Whalen's book is that his monetary history, like Rothbard's, is about people, not policies. While Keynesians talk about unknowable constructs like aggregate demand, Whalen's story turns on the actions of people.
Booms are not periods of prosperity but of the squandering of wealth. The longer they last, the worse is the devastation that follows.
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.
Deposit banking rests on the bank honoring property rights. Loan banking rests on making good loans that will pay off. But when loan banking and deposit banking merged, the temptation to loan out much more than was actually in the bank arose.
Like today's central bankers, John Law proposed to "supply the nation" with a sufficiency of money. The increased money was supposed to vivify trade and increase employment and production — the "employment" motif providing a nice proto-Keynesian touch.
