Richard Cantillon saw the essence of the business-cycle problem long ago. When the government's national bank inflates the money supply by increasing the supply of banknotes, he writes, it reduces the rate of interest and can increase the price of stocks. This is a corrupt process.
The Wikipedia entry on the real-bills doctrine advances the controversial proposition that banks can increase the quantity of money without diminishing the purchasing power of each unit. I will refer to it as the Sproul doctrine.
The only chance to prevent the exchange value of fiat money from collapsing altogether is a return to sound money — a way that would start by reanchoring fiat monies to gold, as outlined most prominently by Mises, Rothbard, and Sennholz.
Rothbard shows that Gresham’s law was introduced not by Sir Thomas Gresham but by the “arrogant, boorish, and feisty” Sir Thomas
This is the sense in which our fiat-money, fractional-reserve system uses "debt-based money."
Recorded at FreedomFest, 10 July 2010. Includes an introduction by Douglas E. French.
"Deflation is one of the great scarecrows of present day economic policy and monetary policy in particular,"
