Since the end of the Bretton Woods agreement in 1971, the dollar has been an irredeemable currency, no longer defined or measured in terms of gold. Nonetheless, in an ironic twist, it has become the world’s dominant currency and the core reserve asset of central banks all over the world. It has replaced gold as an international currency. The
Sir Edward Burne-Jones “The Golden Stairs” The government-controlled monetary regime — the most destructive force set into motion by state interventionism — has finally been blown to pieces. This is the message conveyed by the monetary fiasco in global capital markets, typically referred to as the international credit crisis . However, politicians
Alan Greenspan has again lowered the price of short-term credit (the interest rate that he controls) in an effort to keep the economy from falling into recession. Rather than speculate on whether this will work, I’d like to raise a different set of questions. What is it about our monetary system that permits Greenspan and a handful of others to
The current international monetary system, based on floating fiat currencies, brings about tremendous distortions which inevitably must be corrected. This much has been known to Austrians for some time. Awareness is now starting to spread to mainstream economists. To understand how we got here requires some historical background. Under the
Listen to the Audio Mises Wire version of this article. Is gold money? Many would say so, and a web search returns tens of thousands of additional affirmative responses. If you want to start a fight with a gold bug , take the opposite view. But is it so? To answer the question of whether gold is money requires a definition. This one, from
The advantages of a gold standard are familiar to supporters of the free market. Gold possesses all of the attributes of an ideal medium of exchange. It is durable, portable, malleable, valuable, and fungible, which is why the market chose it as the dominant money before the age of paper money. Most importantly, gold is brought into circulation
Republican Richard M. Nixon closed the gold window Aug. 15, 1971, breaking the last monetary link with the precious metal. During the next three decades, prices as measured by the CPI more than quadrupled, or, put another way, the value of the U.S. dollar has fallen to 24 cents. Meanwhile, the dollar has lost more than two-thirds of its value
The perennial debate over gold is as old as civilization. What makes money valuable? Why do we happily accept some pieces of paper and refuse others? It is because one does or does not have some degree of confidence in the government that issues a currency. So today, for example, almost all players in the National Hockey League, Canadians as well
The Old Republican leader John Randolph, the aristocratic liberal from Virginia, once famously remarked that the framers intended ours to be “a hard-money government.” Is it true? Contrary to the efforts of academics and judges to obscure this issue, the framers’ intentions in regard to money and banking were quite plain and are easily
When President George W. Bush took office in January 2001, the Dow had been in decline for a year, the other markets since March. Within a month, the economy officially fell into recession. Bush responded with a mix of Keynes (tax cuts and higher government spending) and Friedman (cutting interest rates and pumping up the money supply). During
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The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.