The Economics of a Free Money System

Posted by $ blarman 9 years ago to Economics
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A very simple look at how eliminating the Fed would free the monetary system.
SOURCE URL: http://humanevents.com/2015/04/30/a-freer-monetary-system-would-lead-to-better-money/


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  • Posted by $ WilliamShipley 9 years ago
    My favorite money is the giant stone disks used as trade on the island of Yap. These are very heavy so when you pay someone with one of the stones you don't actually give it to them, it stays in the same place, you just keep track of who owns it.

    At one point, according to legend, a work crew was bringing a new stone to the island and it sank in a storm. All was not lost, however, they just decided who owned the stone at the bottom of the ocean and can trade that.

    Of course the important thing about money is that the amount of money available be kept in sync with the amount of goods and services. This way a loaf of bread costs the same amount from day to day and bakers can buy flour and pay people with some confidence as to what they will get.

    Some people prefer gold or silver but the problem with that is that the amount of gold or silver doesn't track with the total goods available. Usually it tends to not keep up which is deflationary, but Spain had an inflationary burst with all the gold from the new world.
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