Money
Achieving sound money
Constitutional prohibitions It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it...
Systemic risk
What can be done to prevent a disastrous collapse in credit in the first place? Forbid force-fed credit First and foremost the government should be prohibited from creating debt instruments, lending to banks, injecting liquidity into banks, setting interest rates,...
How government should deal with recession
Recessions are good Recessions are necessary to enable businesses and individuals to reconnect with reality and to address inefficiencies and misallocation of capital. Although many people suffer pain in the process, the net result is overwhelmingly beneficial. It is...
The credit cycle (credit inflation and deflation)
Fractional reserve banking Centuries ago merchants would deposit their gold coins for safekeeping with a goldsmith. The goldsmith would give the depositor a note which could be used to redeem the gold. Soon merchants found it more convenient to exchange the notes...
Exchange rates
Exchange rates reflect national prosperity. If a country is prosperous it will create surplus goods sought by the rest of the world. The rest of the world will need to purchase domestic currency to pay for those goods, and that will cause the currency to rise in...
The wealth of nations (price inflation and deflation)
The wealth of nations As time goes on, mankind gets richer. This extra wealth is a result of advances in technology and the effects of cumulative investment. These increase the amount of goods and services that can be produced with the same human labor. Whereas before...
The stock of money (monetary inflation and deflation)
But Enoch was right. He had made the two intellectual leaps in economic policy which Keith Joseph and I would only make some years later. First, he had grasped that it was not the unions which caused inflation by pushing up wages, but rather the Government which did...
The issues
Little can be achieved without sound money. It is the bedrock of sound government. —Margaret Thatcher. Margaret Thatcher, The Downing Street Years, 1993. When it comes to money there are three major issues to consider: The stock of money (monetary inflation and...