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To: G. Stolyarov II

Three questions for you:

1. If the money supply is fixed under a gold standard and the population increases, then the average net worth and wages must decrease in proportion to the increase in population. This results in deflation. Do you agree that historically periods of deflation have been more harmful than inflation. How would Ron Paul deal with that?

2. Why would you rather fight islamic terrorists on your own soil than fight them abroad?

3. While you rightfully are fearful for the decrease in freedom, do you have any concept of the reductions in freedom you’ll face once the terrorist bombs start to explode in the United States?


21 posted on 12/24/2007 1:26:38 PM PST by DugwayDuke (Ron Paul - building a bridge to the 19th century.)
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To: DugwayDuke
1. If the money supply is fixed under a gold standard and the population increases, then the average net worth and wages must decrease in proportion to the increase in population. This results in deflation.

If you would read von Mises' "Theory of Money and Credit" or James Grant's "Money of the Mind" you would be less confused about how the gold standard banking regime operated. The money supply wasn't restricted to the amount of gold in the system. 'Credit money', 'bank money', expanded with the economy. Gold convertibility served primarily to keep credit expansion from becoming an engine of inflation.

49 posted on 12/28/2007 6:07:05 PM PST by Pelham (No Deportation, the new goal of the Amnesty Republicans)
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