Thus said Nicholas Leippe on Thu, 04 Dec 2008 12:54:57 MST: > Money supplies _must_ be able to expand. Seriously, watch the > documentary. I wish everyone would.
This doesn't have anything to do with an argument against gold as money. The supply of gold can certainly expand, at least until we've discovered all of it. Even then, if we had an absolute fixed supply of money, why _must_ it be able to expand? Given a fixed supply of money, prices would generally decline over time as productivity and improvements in technology generated more real wealth. Or more to the point, the purchasing power of said fixed amount of money would be rising over time. And also, if gold were suddenly no longer able to meet the needs of people, it would be replaced by something better, naturally. Fiat money was not something that the people desired or demanded, and in fact, it took ``legal tender laws'' to actually make people use it. > 2) Fractional reserve banking allows banks to control the money > supply. (Thus they can facilitate transfers of wealth to them--the > rich get richer) I believe it would be more correct to state that governments that don't allow banks practicing in fractional reserve banking to fail when people demand their money, is what allows banks to control the money supply. I've watched The Money Masters and I found it to be less useful than a good economics book. Andy -- [-----------[system uptime]--------------------------------------------] 10:20pm up 4:20, 2 users, load average: 1.07, 1.08, 1.11 /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
