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From: bcw@duke.UUCP (Bruce C. Wright)
Newsgroups: net.legal
Subject: Re: Paid in Dollars?
Message-ID: <4107@duke.UUCP>
Date: Thu, 22-Mar-84 16:56:43 EST
Article-I.D.: duke.4107
Posted: Thu Mar 22 16:56:43 1984
Date-Received: Sun, 25-Mar-84 07:14:17 EST
References: <243@teldata.UUCP>, <1047@proper.UUCP>, <257@teldata.UUCP>
Organization: Duke University
Lines: 19

Hard money (gold or other precious metals) is *not* better than
paper money because the hypothetical exchange rate to such a
system would produce lower prices because, of course, everyone
would have a smaller number of dollars or whatever your monetary
unit was!  Hard money's major advantage is that it is very difficult
for governments to inflate the money supply by printing more;  there
is always an incentive for the government to inflate the money supply
if doing so costs it less than minting coin whoseintrinsic value is
close to its nominal value - then the government doesn't have to
raise taxes (with all the problems that causes with the populace).
And, of course, a sufficiently inflated money supply will destroy
anyone's wealth who has kept that wealth in a form tied to the value
of money ... unfortunately, this almost always includes (and falls
most heavily upon) the old and the poor.

Don't say it can't happen here like it did in Germany in the 20's ...
it already has!  Ever heard of a Continental?

			Bruce C. Wright