Ludwig von Mises wrote: Whoever dares to hint at the possibility that nations may return to a domestic gold standard is cried down as a lunatic. The proinflationist propaganda emphasizes the alleged fact that the gold standard collapsed and that it will never be tried again. First of all, there is need to remember that the gold standard did not collapse. Governments abolished it in order to pave the way for inflation. Second, whatever compliant government economists may have said, inflationism is not a monetary policy that can be considered as an alternative to a sound-money policy. It is at best a temporary expedient. FULL ARTICLE
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Paul:
You didn’t deny that issuing “warehouse receipts” for silver, wheat, and land is not fraudulent, as long as the goods are held by the bank, so I take it you agree: No fraud.
You also didn’t deny that the value of these warehouse receipt will be equal to the value of the commodity backing it, so I’ll take our agreement further: No inflation.
You do deny that those warehouse receipts are money, and you deny that there can be more than one type of money. Those are transparent errors. People can, and have, and do, use all sorts of things for money–often side-by-side with other moneys.
Hi Mike,
“You didn’t deny that issuing “warehouse receipts” for silver, wheat, and land is not fraudulent, as long as the goods are held by the bank, so I take it you agree: No fraud.”
Issuing warehouse receipts for commodities held is valid. Issuing tickets that appear to be title to money where no money exists is fraud. The problem is that your scenario is so counter to the realities of economics, ethics and money, that it is hard to disentangle what is pure confusion and chaotic mangling of concepts and terms from what should be considered intentional misrepresentation of the essence of a fractional reserve banking technique.
“You also didn’t deny that the value of these warehouse receipt will be equal to the value of the commodity backing it, so I’ll take our agreement further: No inflation.”
This is like wondering how hard it is raining when you are 10 feet under the surface of the lake. You can’t get any wetter, anyways, and as long as you remain in the lake, rain just doesn’t matter. Your theory of money is so outstandingly incorrect that if ever one were unfortunate enough to live under some system resembling it, inflation would be the least of one’s worries.
“You do deny that those warehouse receipts are money, and you deny that there can be more than one type of money. Those are transparent errors. People can, and have, and do, use all sorts of things for money–often side-by-side with other moneys.”
Yes, I deny that any and all commodities can function equally as money at the same time. I guess I’ll just have to stick to my transparent errors on the theory of money. LOL.
I’ll give you this much, Mike, you have picked the toughest crowd – mises.org – to put forth your money theories, and I admire that kind of boldness, persistence and tenacity. I would not have the patience to find a Keynesian site and try to persuade Keynesians of the errors in their ways. And this is true even though I know they are entirely mistaken on practically every economic view they hold.
Paul:
So if someone issues one kind of paper receipt every time someone deposits one ounce of silver, and another kind when someone deposits (say) 1/16 oz of gold, and another type when someone deposits one pound of copper, then you have no problem with that until someone buys groceries with one of those receipts? Then would you prohibit such a purchase? You either have to renounce libertarianism or the quantity theory. They are incompatible.
Don’t be silly, Mike. Where did he say he’d prohibit anything? If you go to your local supermarket and offer to pay for your purchases with a pile of shoes, there’s nothing wrong with that. Chances are, they won’t accept your offer, though. Same thing whether you offer shoes or warehouse receipts for shoes. Or warehouse receipts for pounds of copper, etc. Those things are not money. But I’m 100% certain Paul doesn’t have a problem with them.
[The problem comes when you offer a "warehouse receipt" for pounds of copper which _are not actually in the warehouse_!]
Peter & Paul:
If you have no objection to the issue of warehouse receipts for various commodities that are actually in the warehouse, and if you don’t object to people buying groceries with those receipts, then I take it you also agree that any amount of those warehouse receipts can be issued without causing their value to fall. That already sounds a lot like the real bills doctrine.
(BTW Paul: I wouldn’t have the patience to argue with Keynesians either. My only serious disagreement with Austrians is over the real bills doctrine.)
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