Wednesday, September 12, 2012

Keynesians are honest in their confusion


I can see why Bernanke and the rest of Keynesians are genuinely confused. They just don't get the point... which is: you shouldn't be able to print it easily, and it should have intrinsic value. That's real money.

Of course, that's just words. I might as well say: "cars should not have safety belts, and motorcycles should have only three wheels".

So, to see what gold standard is all about, read this. If you don't feel like reading a lot of background and introductory theoretical info, you can skip to this: The "Proper" Supply of Money.
Now we may ask: what is the supply of money in society and how is that supply used? In particular, we may raise the perennial question, how much money "do we need"? Must the money supply be regulated by some sort of "criterion," or can it be left alone to the free market?

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