Before there is any hasty attempt to print money and try to inflate our way out of trouble, here is a timely warning from that most misunderstood of economists - John Maynard Keynes.
"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
3 comments:
Good to see he's cropping up in conversations now.
His ideas of market intervention in the onset of recession is bold, and to my mind wastes money on trying to prevent the inevitable and leaves nothing in reserve if it doesn't work.
Its all untested however, his ideas where based on accumulating surpluses in good times and applying them in the bad times.
Without the surpluses, spending in this fashion is what resulted in the IMF turning up to the UK in 1976.
His comments on currency have to be on the back of creating a strong and stable cyclical system, that allows interest rates and money supply to be set to the right position to strengthen the currency (but not to much).
Neither he nor Milton Friedman would be happy with Nu-Labours latest great idea that a cheap currency will save all our manufacturing problems.
Keynes is misunderstood because he kept changing his mind, such as when Hayek completely obliterated his theory of money and credit. Keynes just folded his tent and went home.
Great lectures on Keynes in the media section of mises.org
"Control the coinage and the courts. Let the rabble have the rest"
mission accomplished
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