Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: vpintheak
Higher gas prices do keep other prices lower than they would be in an inflation. Some other prices rise in tandem with gas prices i.e. those commodities that depend on gas to be delivered. The result is that some things disappear from the market even if their prices don't rise because their is no money to pay for them after the petroleum is paid for. The rise in gas prices does not change the amount of money in the market, they just suck up more of it leaving less for other things. Inflation cannot truthfully be blamed on anything other than the creation of excess money.

There was essentially NO inflation from when the Civil War paper money inflation was snuffed by return to gold until FDR took the country off the gold standard domestically. There can be inflation on a gold standard as there was in the sixteenth and seventeenth centuries when the world stock of gold increased relatively quickly due to the Spanish looting of South America and Mexico but that did not become permanent because the looting of the Aztec and Inca treasury ran out of supply. Without gold 1 to 1 backing, money is infinitely inflatable at political whim. Inflation also occurs to some extent in the "private" market when banks are allowed to operate on fractional reserves, which is itself the creation of money, the rate of which is manipulated by the politicians.

A stable gold backed money allows a steady economic improvement that is not so flashy as can seem to occur with inflation and fractional reserve banking but it is much more sustainable and draws in real foreign investment and discourages foreign and domestic vaporous speculation

32 posted on 09/18/2023 3:45:53 AM PDT by arthurus (! covfefe i)
[ Post Reply | Private Reply | To 2 | View Replies ]


To: arthurus

Does not the amount of currency, gold backed or otherwise, have to be at an amount conducive to handle the conversion of goods and services produced into it to eliminate barter?

in other words of an economy produces thousands of shoes and a thousands of loaves of bread, would not only a dollar in circulation be a problem to handle the conversion so that the shomakers can buy bread and the bakers shoes?


44 posted on 09/18/2023 6:08:51 AM PDT by funwithfood
[ Post Reply | Private Reply | To 32 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson