COMMENT: You just wrote in your definition of Hyperinflation “They debased coinage routinely, which is why Jean Baptiste Say (1767-1832) argued money has never been “tangible” or a store of value. So simply making money out of gold or silver does NOT prevent the very evils the gold promoters attribute to fiat.” Thank you so much. I now see your entire argument against the Goldbugs. They are indeed historically wrong. Keep up the good work.
REPLY: Yes. Even Jean Baptiste Say (1767-1832) argued that people would not hoard money because states routinely debased it. This was Gresham’s Law, that bad money drove good money out of circulation, meaning debasement. Henry VIII (1509-1547) was notorious for his debasement. Gresham advised his daughter, Elizabeth I (1558-1603) and made the observation how people did not recognize the debased coinage and this forced prices to rise.
The whole proposition that money has to be tangible is like trying to argue that the world should be vegetarian. Animals eat animals. Being a vegetarian is a personal choice that cannot be forced on the world. That is simply how nature works. You cannot change that. This idea that money should be tangible and always retain its value is up their with Marxism. It defies history and you cannot show any period in the past where such a Utopian world of finance ever existed. Bretton Woods collapsed as did every attempt to create any monetary system of some fixed value. There is a natural course of a business cycle to the economy you cannot flat-line or eliminate no matter how many schemes you invent from central banks, Keynesianism, Monetarism, Socialism, or Communism. It just cannot be accomplished.
Sorry – been there, done that countless times.
You cannot confuse what money is as the cure for corruption in politics.This is an indirect solution making money “tangible” to prevent fiscal irresponsibility. This is like fining your wife because she did not nag you to take out the trash or fining her for over-sleeping that caused you to get a speeding ticket because you were late for work. Come on! Deal with issues head-on, not indirectly. The Fed raises and lowers interest rates hoping to impact demand and inspire banks to lend. Stop the nonsense. Regulate banks as they do utilities and ELIMINATE proprietary trading. Deal with the issue!!!! Making money “tangible” will never have any impact upon forcing fiscal responsibility upon politics. The two concepts are incompatible and should have been divorced when they first met.