Why Credit Needs A Golden Anchor
The comments below are an edited and abridged synopsis of an article by Alasdair Macleod
Macleod examines the relationship between credit and its anchor in value. Today, that anchor is fiat currency, which is unstable. Historically, it has always been gold.
The relationship between credit and whatever provides an anchor to its value is a far larger topic than commonly discussed in economic journals. It involves an understanding of the relationships between currency credit and commercial bank credit, the consequences of which rarely occur to economic commentators.
There is evidence that changes in central bank credit have a greater effect on prices than an equivalent change in commercial bank credit—a new and important topic for consideration.
This article draws on the history of law as it applies to banking, money and credit. For both contemporary economists and the layman, it involves some concepts that may be unfamiliar. But given that they concern the survival of contemporary currencies, they are worth making the effort to understand.
Up for discussion: Introduction; understanding gold—real money; defining credit; the future course of credit values; the solution is now politically impossible; and we are sliding towards either WW3 or gold.