Sunday The reason that all those who have been predicting hyperinflation have been wrong for so long is not hard to find. They are adherents to the Quantity Theory of Money. The QTM states that the more ‘money’ (fiat) is in circulation, the higher that prices will rise. The theory is economically, historically and demonstrably wrong. Many, many factors, … [Read more...]
Waiting for Inflation – Waiting for Godot?
Monday I see headlines warning of inflation (meaning rising prices), even hyperinflation. These predictions have ebbed and flowed for just under twenty years and many a commentator has a face full of egg. Not that any of them have acknowledged being wrong, or apologised for misleading their readers. Their basic problem was the belief that the more credit notes (fiat) … [Read more...]
Money is not a Good
Friday I just read a piece on the monetary metals by a writer that I hugely respect. In this rare instance, he is wrong. He describes Gold as a good with a declining marginal utility. Many important new understandings emerged from Dawn of Gold. One of them (Chapter 8 – The Measure and the Measured) was that money is not a good. The logic is quite conclusive. Menger’s … [Read more...]