Fiat Money and Dark Forces at Work
Government paper fiat money does more than just cause economic havoc. It also is an exercise in profound dishonesty and theft.
Government paper fiat money does more than just cause economic havoc. It also is an exercise in profound dishonesty and theft.
Argentina President Javier Milei is proposing a new law that would “declare it an imprescriptible crime for the state and the central bank to monetize the public deficit and create inflation.” While it may be politically rejected, it does point to the real dangers of inflation.
Perhaps John Maynard Keynes' best con job was convincing people that a growing economy needs inflation, lots of inflation. As David Gordon points out, however, Ludwig von Mises eloquently explained why inflation undermines the free market economy.
We have reached this point: the government keepers of money do not even understand what money is or why inflation is harmful. To them, the real threat to the economy is “deflation.”
The child-like obsession with buying stuff that American society is often criticized for around Christmas is a sought-after result of our government’s monetary policy.
President-elect Donald Trump has declared that he will raise tariffs his first day in office. Our economy, however, does not need government-created roadblocks to trade. Instead, we need free exchange and sound money.
One of the fallacies pushed by monetary economists is that a growing economy needs a growing supply of money in order to prevent deflation, which they claim is as harmful as inflation. However, as Austrians point out, there is no “optimum” amount of money in the economy, since prices adjust.
In replying to a previous article by Frank Shostak, Douglas French writes that if an increase in the supply of gold ultimately leads to an expansion of bank credit, that is enough to start the boom-and-bust cycles, even if there is no central bank to accelerate the process.
The state and its friends reject the scarcity principle and uphold its polar opposite, the Santa Claus principle.
The Fed lowers interest rates ostensibly to “stimulate” the economy. But while the Fed claims it is strengthening the economy, it actually weakens it through its easy-money policies.