On Sep 26, 2008, at 1:35 AM, Sandy Harris wrote:
> John Thornton <jthorn65 at sbcglobal.net> wrote:
>
>> Sandy Harris wrote:
>
>>> It prevents governments from just printing and spending money,
>>> the real cause of inflation. The US dollar was originally about
>>> an ounce of silver. Last I looked, silver was over $10/ounce.
>>
>> The "real" cause of inflation?
>
> It is quite obviously one cause. If governments can just print what
> they want to spend, then the currency is devalued. That causes
> prices to rise. Now a real goldbug would argue that it is the only
> cause and that "fiat money" should be banned.
>
That's better than "real cause." But "cause" is a very ambiguous
word, and misleading here, as is the equally ambiguous term "money".
We are dealing with *legal tender,* the essential nature of "money."
It is the uncontrolled increase in the supply of legal tender that is
the necessary condition (what Aristotle called the "formal cause") for
price inflation. Even a "real goldbug" would recognize that the
goldrush inflations of the 16th and 19th centuries were not caused by
government spending of fiat money or clipped coin.
Shane Mage
"Money is not, by nature, gold; but gold is, by nature, money." (Karl Marx)