We should put it in a coin (photo from the Roger Viollet/Getty Images collection)
Roger Viollet via Getty Images
A few years ago I wrote a pieceFor public discourse, called “Montesquieu and the Monetary System”. He discussed that the Fiat Money, the non-Golden money, today, in terms of the French legal sage of the eighteenth century, Montesquieu. Of Laws He argued that the legal arrangements are correctly from the morality of the people – that there must be little “space” between the laws and the legal contracts they determine and the real desires of the population regarding the order of society.
Fiat Money fails in this test. The public discourages money and longs for the days when the American expression “sound as a dollar” meant something. The United States was in the Golden Standard until 1971 and silver coins were cut until 1964, these dates marked the final points of the most longing period of all American economic historians, in popular fantasy today-that of post-war prosperity after World War II. Americans today prefer, as always, classic monetary systems, not Fiat.
The opinion of experts is the opposite. They think the Fiat money is large and that the gold standard is in particular in the bin of history. They reject the return to a golden model completely, take impatient with fun objections and show the overwhelming consensus between professionals and monetary cases that any gold standard examination is a waste of time, resources and energy. Ben Bernanke’s position that he had no idea what the gold markets moved inspired the issue. A main monetary captain, such as a Federal Reserve chair, perhaps above all, has to have an opinion on what’s gold markets.
The population loves gold -like money, experts reject such money and this is the situation we have. It’s a very nice picture of what Montesquieu arrived. The public wants something, but his legal conventions give him something else. Therefore, something he has to give.
You can say bitcoin. Surely we do in our new book; Free Money: Bitcoin and American Monetary DeliveryIn which we make the assumption that the whole monetary history of the United States has a momentum in one direction, in classic money. Because we made the classic money, over time came a bitcoin approach.
But there are other ways, equally important, that the public preference for classic money is manifested. I submit this the whole of the affordable affordable roof comes from this preference. Such as I debated A few weeks ago, the Home-Price Case Shiller, which began running in the nineteenth century, was only flat for seventy-five years before the bust of the gold standard around 1970.
Housing prices in the United States have always been low and stable – until we got out of the gold standard in 1971.
From the event, Case-Shiller has jumped and jumped. There was some repetition here and there, but in general, the index has increased. Before 1971, fixed. Post, 1971, UP.
The search for alternative causes is not necessary. Housing and Earth are classic phrases against Fiat money. There are other factors in the total average housing prices – the taxes of institutions – but even building materials in important cases (such as copper) have significant compensation against Fiat money. Earth is a counterbalance against non -geological (gold) money. We went from gold and had an explosion on what a home, land and therefore homes.
It is not so much that the houses have not become unacceptable as the country’s portfolio preference has shifted to real estate and away from other components of the total asset, the whole division is very different from whether we had a classic monetary system. The property of stocks behaved in the same way as I wrote in various cases. Stocks have monetary and tax hedge hedge hedge hedge. Their purchase en masse has essentially taking place only from The 1920s – that is, after the imposition of the Federal Reserve and income tax in 1913.
The loss of efficiency in the economy in the existence of huge shifts the preference of the portfolio, because the money contract is not what the public wants is necessarily high. We had an increase of two percent at best in the whole 21Fcentury. This is half, at best, what was normal throughout American history. The 1970s were an economic fire. Gold fell to the markets of the 1980s and 1990s, as real estate calms down once. Then we had great real economic growth.
When we had a SimulaCrum of a golden model since 1971 – prices of the 1980s and 1990s – prices have guided their appreciation and volatility. When we do not – in the 1970s and 2000s to date – we have housing bubbles and the casual bust as a matter of course.
Bitcoin will probably come to save us from Fiat’s money and thus restore normal portfolio preferences throughout the boat, including real estate. In the meantime, the professional monetary class could take the index respect for Montesquieu seriously. We have fiat money, but the public hates it. Therefore, a professional class, you need to start discovering good reasons, complete with models and algebra to find it bad. And if your experience tells you differently, it fools you.
