Money and Banking

"Inflation worked as a tax on those further removed from government spending."

The excellence of the gold standard is to be seen in the fact that it makes the monetary unit's purchasing power independent of the arbitrary and vacillating policies of governments, political parties, and pressure groups.

Recorded at the Mises Circle in Seattle, September 12th, 2009. Sponsored by James M. Wolfe.

Printing green pieces of paper doesn't make an economy richer. If done without restraint, it leads to runaway price inflation. As an added downside, it also allows governments to slaughter millions of people. (The world wars could not have been waged if the belligerents had stuck to the gold standard.)

Rothbard has in addition a carefully worked out theory, Austrian economics, to guide him.

In the period from 1913 to 2007, the Fed — implementing its mission to "stabilize the price level" — destroyed over 97 percent of the purchasing power of the dollar. (For comparison's sake, note that the value of the dollar had increased slightly during the 100 years before the Fed was created.)

Central bank's and government's loose monetary and fiscal policies are instrumental in the weakening of the process of real savings formation through the diversion of real savings from wealth generators to non-wealth-generating activities.

Wall Street — especially since this financial crisis began — has been anything but a bastion of laissez-faire capitalism.

I will not contend that this scheme is free from all the defects inherent in government interference with economic affairs.

Recorded at Mises University 2009.