Also people who claimed the earth is round were killed at some point in time. Horses have been the most common means of transportation for thousands of years.. Is that also part of your Austrian economy? You know your arguments have no logical foundation. Your conclusions are disconneced from your permises. Your deductions are not valid and your premises are not sound, they are full of fallacies. Is that how you dream of society? No thanks, we will let you alone in your lonely way to darkness.
No, it's a sign of that I don't feel like wasting the time to explain something that actually a significant amount of time. You two do not even have the first idea of how lending is done under a 100% fractional reserve system. A form of it still exists today, look up hard money lenders. I'm done with this thread. Enjoy more Keynesian/Monetarist solutions.
If we tie our money down with "precious" metals, we'll sure get rid of inflation. But inflation isn't always bad. It's the counterpart of economic growth. The real economy can't expand without a gradually expanding money supply. But what about scarcity of resources? Technically, the world's real gdp could only expand to a certain point, when there's no more new gold. And then when everyone realizes you can't blow your nose or wipe your ass with gold or a "basket of commodities", we're back to paper fiat. Quilted paper fiat.
Why? As long as there is a sufficient supply of gold to ensure that the physical commodity is available to facilitate trade, even with a finite supply of metal it would simply increase in purchasing power would it not? If the denominations of coinage were so high as to be worth to much, smaller coins could be minted or a metal of lesser value substituted as was the case with silver.
I think supply of metal and supply of money have not much to do with real output of an economy in correlative terms. We are talking about systematic stability, breeding ground for investment, maximum employment, etc. A technology increase alone can increase real economic output despite being deflationary, regardless of money or metal supply. (look to industrial revolution or if we discovered nuclear fusion)
I have no problem with that. The crux of the problem is the form of money. Scarcity is the essence of value, if we use a form of money that can be rapidly expanded at will by the decision of a few for the benefit of a targeted segment of the economy, those not on the list are put at a disadvantage by not being recipients at the beginning of the infusion or at least having to wait for the effects to trickle down to them. By definition a fiat currency is unstable because it is generated by fiat or "a decree by person of authority".
The beauty is that we have something else to gamble on (the value of the currency). Government policy affects price of everything, so its much the same even if the Fed didn't exist. These guys would just find something else to complain about. (farm subsidy & mandate, defense spending, etc. etc) And the absence of government policy ... well that is just as bad. You can't win. Carnegies, Rockefellers, etc didn't come into existence because the government put them there. This is a natural result of competition. Some are able to win so well they can monopolize, and most don't.
I am a little puzzled by the idea that gambling on the value of currency seems a good idea. It seems contrary to the desire for stability and growth. As far as governmental machinations go I couldn't agree more. Politicians are the bane of society. As to the monopolists, they are the result of unfettered capitalism, no doubt about that but they do have help from government simply because they have access to influence in the making of laws and regulations which put their smaller rivals at a competitive disadvantage which will over time result in their elimination. This brings us to one of the fundamental tenants of Austrian theory. It is the duty of government to ensure private property rights and the enforceability of contracts. Individual rights are the fundamental pillar of free society.