Inflation, Money Creation, and the Gold Standard

“In a social order that is entirely founded on the use of money and in which all accounting is done in terms of money, the destruction of the monetary system means nothing less than the destruction of the basis of all exchange.” – Ludwig von Mises, The Theory of Money and Credit, p. 202.

In a recent email chain, some of my friends said the gold standard was crazy and wrote of the need for the Federal Reserve to manage our money supply—relying on appeals to “experts” to make their case. I wrote the following to try explain the problem with central banking. I hope you find it informative:

The fact that most economists and “experts” think returning to the gold standard to be crazy should be another reason to support such a move, given the competence of most economists these days.

But lest I rely too heavily on ad hominem attacks against them to make my case, let’s look at the facts.

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