British Columnist vs. Ron Paulís View of Central
by Gary North: Loaded
Guns and an Empty Fort Knox
for the London Telegraph admitted that he had a deadline
to meet, but he had nothing much to say. Then he proved it.
his audience had any idea what he was talking about when Ron
Paul, the US presidential hopeful, declared that we are
all Austrians now, but you have to be a true believer
in that particular school of economics to think that doing nothing
at all might actually have some merit. Would the world be any
worse off without central banks? Well, they dont seem
to have done too well in recent years. They seem to be like
the grand old Duke of York, marching things up to the top of
the hill only to march them down again. Why not just stay in
the same place?
an amusing thought, but the history of money before the advent
of modern central banking is not reassuring.
that financial reporting in Great Britain is as ill-informed as
it is in the United States.
the monetary system that existed for a century before the Federal
Reserve System. The international gold standard linked Western
Europe and the Western hemisphere.
prices In England from the end of the Napoleonic wars in 1815
until the outbreak of World War I in 1914 declined by one-third
to one half. Economic historians have known this for 95 years.
See the book, Economic
Conditions, 1815 & 1914 by H. H. Hodges. It appeared
In the way
of general price movements, it must suffice to say that according
to the calculations of Jevons and Sauerbeck, the average of wholesale
prices of general commodities in England for the years 1912-14
was between one-half and two-thirds of the average for 1810-20.
ups and downs, booms and busts, because there was fractional reserve
banking, as Austrian business cycle theory contends. But wholesale
prices did not rise for a century.
Reserve System went into operation in 1914. The dollar has declined
in purchasing power by over
bank has preserved the purchasing power of its national currency
since 1914. Every nation has experienced price inflation. Every
nation has also experienced booms and busts.
of central banking was simple: price stability and a reduction
in the severity and frequency of what we now call recessions.
We got more recessions, and the Great Depression, which lasted
understands Austrian business cycle theory. He also understands
more of price history than the columnist does.
of economic understanding within the financial media is abysmal.
Reading on blogs.telegraph.co.uk
North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible.
2012 Gary North
Best of Gary North