The Mystery of Banking
Murray N. RothbardSözler ve Alıntılar
A particularly striking case is the dinar, the coin of the Saracens in Spain. The dinar, when first coined at the end of the seventh century, consisted of 65 gold grains. The Saracens, notably sound in monetary matters, kept the dinar’s weight relatively constant, and as late as the middle of the twelfth century, it still equaled 60 grains. At that point, the Christian kings conquered Spain, and by the early thirteenth century, the dinar (now called maravedi) had been reduced to 14 grains of gold. Soon the gold coin was too lightweight to circulate, and it was converted into a silver coin weighing 26 grains of silver. But this, too, was debased further, and by the midfifteenth century, the maravedi consisted of only 1½ silver grains, and was again too small to circulate.
Sayfa 12
But while people can get rid of money individually, by buying things with it, they can’t get rid of money in the aggregate, because the $100 billion still exists, and they can’t get rid of it short of burning it up. But as people spend more, this drives up demand curves for most or all goods and services. As the demand curves shift upward and to the right, prices rise. But as prices overall rise further and further, PPM begins to fall, as the downward arrow indicates. And as the PPM begins to fall, the surplus of cash balances begins to disappear until finally, prices have risen so much that the $100 billion no longer burns a hole in anyone’s pocket. At the higher price level, people are now willing to keep the exact amount of $100 billion that is available in the economy.
The market is at last cleared, and people now wish to hold no more and no less than the $100 billion available. The demand for money has been brought into equilibrium with the supply of money, and the PPM and price level are in equilibrium. People were not able to get rid of money in the aggregate, but they were able to drive up prices so as to end the surplus of cash balances.
Sayfa 34 - PPM is the purchasing power of the dollar
For while money, as we have seen, was an indispensable discovery of civilization, it does not in the least follow that the more money the better.
Sayfa 44
The proportions are changed slightly from their nineteenth century definitions to illustrate the point more clearly. The “dollar” had moved from Bohemia to Spain and from there to North America. After the Revolutionary War, the new United States changed its currency from the British pound sterling to the Spanish-derived dollar. From this point on, we assume gold as the only monetary metal, and omit silver, for purposes of simplification. In fact, silver was a complicating force in all monetary discussions in the nineteenth century. In a free market, gold and silver each would be free to become money and would float freely in relation to each other (“parallel standards”). Unfortunately, governments invariably tried to force a fixed exchange rate between the two metals, a price control that always leads to unwelcome and even disastrous results (“bimetallism”).
Sayfa 9