Unsound Money, Unsound Economy
The comments below are an edited and abridged synopsis of an article by George Ford Smith
Most students of economics accept such things as the necessity of a central bank to prevent/ameliorate recessions. They take as a given the need for government intervention in the economy. Perhaps most of all, they regard an unregulated gold coin standard as backward and naïve.
But what has happened since the creation of the Federal Reserve in 1913? In a speech at The Economic Club of New York in December 2002, Fed Chairman Alan Greenspan said that two decades after the abandonment of the gold standard, the CPI in the US nearly doubled. And forty years after that, prices quintupled.
The Bernanke solution to the crisis was more aggressive money printing, creating staggering levels of debt and moral hazard, so that today financial pundits are predicting another crisis, likely worse than the last.
But some economists rejected the need for government intervention in the economy. Specifically, the Austrian-school economists maintain that interventions not only fail but are almost always used to justify further interventions to fix the previous failures. This continues at enormous cost and suffering until we find ourselves in the mess we are in today, where Democratic candidates in 2019 openly call for socialism to fix the failures of the free market they have spent decades destroying, along with their partners-in-crime, the Republicans.
Where can someone get the straight story on the item that is involved in virtually every economic transaction—money—and how its corruption has led to economic misery and injustice?
One excellent source is Joseph Salerno’s book Money, Sound and Unsound: “If a domestic money consists of a commodity, a pure gold standard or cowrie bead standard, the principles of monetary policy are very simple. There aren’t any. The commodity money takes care of itself.”
How about that? Under a true gold standard, monetary policymakers would join the unemployed.