Mr. Royce Johnson was my high school civics teacher, or rather my US history teacher or whatever it was called back then.
I don't remember much about the class, but I do remember something he said about gold. "There isn't enough of it in the world to be used as money any more," or something to that effect.
Isn't that interesting? Years later, while trying to make some sense of the economics stupidities one hears constantly in the lay press and around campuses and by water coolers, I learned two things (from the writings of Murray Rothbard, Ludwig Von Mises, Lew Rockwell, and Gary North.)
1. There is no social benefit to an increase in the money supply.
2. The total amount of money in the money supply doesn't matter.
Let me explain both of these. People and society as a whole are not benefited by an increase in the total amount of money in circulation, or the money supply. An increase in the money supply causes (or is really) inflation. This is not a benefit to society.
However, that is not to say that someone is not benefited by an increase in the money supply (at someone else's expense). Counterfeiters are directly benefited by an increase in the money supply. They just make a few, crisp bills and they get to spend it until they get caught by the official counterfeiters. (More on them later).
The Federal Reserve System of the US and indeed, every central bank on the planet are the official counterfeiters of the world. They create money out of thin air and generally lend it to their respective governments, which then spend it on their favorite people and projects. This, of course, benefits the few at the expense of the many, which is why increases in the money supply do not benefit society.
Next, the point that my high school teacher did not understand is that the total relatively small amount of gold in the world is not an impediment in its functioning as money.
Consider this; what does it matter if your next car costs one, ten, one hundred, one thousand, one million, or one billion units of currency or coins of gold. What matters is the ratio between the work you do that brings in the gold and how many of those coins you need to buy the car.
In fact, the relatively small amount of gold in the world makes it ideal as money (as well as its other qualities), because it cannot be easily manipulated by the central banks of the world. This is also the reason that the central bankers of the world universally hate gold; it cannot be easily counterfeited or manipulated. That really puts the crimp on their monetary and fiscal policy and that's why anyone who really cares about freedom should love gold.
Gold has been chosen as money by nearly every civilization in history. Take some time to learn about it here.
So, sorry Mr. Johnson, you'll have to repeat the 11th grade.
I don't remember much about the class, but I do remember something he said about gold. "There isn't enough of it in the world to be used as money any more," or something to that effect.
Isn't that interesting? Years later, while trying to make some sense of the economics stupidities one hears constantly in the lay press and around campuses and by water coolers, I learned two things (from the writings of Murray Rothbard, Ludwig Von Mises, Lew Rockwell, and Gary North.)
1. There is no social benefit to an increase in the money supply.
2. The total amount of money in the money supply doesn't matter.
Let me explain both of these. People and society as a whole are not benefited by an increase in the total amount of money in circulation, or the money supply. An increase in the money supply causes (or is really) inflation. This is not a benefit to society.
However, that is not to say that someone is not benefited by an increase in the money supply (at someone else's expense). Counterfeiters are directly benefited by an increase in the money supply. They just make a few, crisp bills and they get to spend it until they get caught by the official counterfeiters. (More on them later).
The Federal Reserve System of the US and indeed, every central bank on the planet are the official counterfeiters of the world. They create money out of thin air and generally lend it to their respective governments, which then spend it on their favorite people and projects. This, of course, benefits the few at the expense of the many, which is why increases in the money supply do not benefit society.
Next, the point that my high school teacher did not understand is that the total relatively small amount of gold in the world is not an impediment in its functioning as money.
Consider this; what does it matter if your next car costs one, ten, one hundred, one thousand, one million, or one billion units of currency or coins of gold. What matters is the ratio between the work you do that brings in the gold and how many of those coins you need to buy the car.
In fact, the relatively small amount of gold in the world makes it ideal as money (as well as its other qualities), because it cannot be easily manipulated by the central banks of the world. This is also the reason that the central bankers of the world universally hate gold; it cannot be easily counterfeited or manipulated. That really puts the crimp on their monetary and fiscal policy and that's why anyone who really cares about freedom should love gold.
Gold has been chosen as money by nearly every civilization in history. Take some time to learn about it here.
So, sorry Mr. Johnson, you'll have to repeat the 11th grade.
