Can Gold Cause the Boom-Bust Cycle?
In the real world, of course, the real danger of credit expansion and the boom-bust cycle comes from fiat money and fractional-reserve banking.
In the real world, of course, the real danger of credit expansion and the boom-bust cycle comes from fiat money and fractional-reserve banking.
Governments have caused the monetary and economic debacle by taking control of money production.
"There can be no such thing as a Keynesian state on the gold standard, any more then a cocaine addict or compulsive gambler can be on a strict budget."
"Do you think Alan might basically be a social climber?"—Ayn Rand
Bankers who engage in fractional-reserve banking really do create "money out of thin air." Austrian economics is superior to Marxism in every respect.
The argument of sticky wages does not justify the existence of a central bank. Market prices, including wages, are flexible enough to smooth out macroeconomic disturbances.
Unless Hugo Chavez's government suddenly ends spending and returns to a free market, the most likely conclusion to current events in Venezuela is a crisis of interventionism, as the bolívar collapses and the government finds it more and more difficult to fund itself.
"The Bank of England has been reduced to the position of a part of the machinery for the manufacturing of political money in any quantity that may be required."
"There is a definite sense in which the government plays by a different rulebook, because the central bank waits in the wings to monetize its debts."