Only two clarifications to add to Derek's excellent explanations:
"Richard Newell" <richard@n...> wrote:
long periods where the gold standard (or something similar) was used with
no ill effects.
New gold gets discovered. Advocates of the gold standard aren't advocating a
fixed money supply. They're saying that they'd rather see the money supply
increase at the rate at which gold or silver are discovered, rather than at
the rate set by central bankers. If I lived any time and place other than
America post 1982, I might agree with them. Then again, there was the silver
inflation in Spain after the discovery of the New World....
The idea that a slow increase in the value of money due to productivity
increases
You mean production increases, as you said earlier in your post.
Productivity is output per unit input, but gross production is what matters
here.
Brian Holtz
Yahoo! Inc.
2004 Libertarian candidate for Congress, CA14 (Silicon Valley)
http://marketliberal.org/>
blog: http://knowinghumans.net/>
book: http://humanknowledge.net/>