Mises ^ | April 28, 2011 | George F. Smith
Posted on Friday, April 29, 2011 3:56:11 PM by george76
Throughout history, governments have fought against the use of sound money.
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Governments can only wring so much money from their citizens through taxation without inciting civil disobedience, so they make friends with bankers, who have a way of making money appear from nowhere. The money they create isn't sound, but almost no one cares. For politicians, it's sound enough; it provides them with claim tickets to market wealth, which is all they want. Sound money would not cooperate in this manner. It does not emerge from central-bank policy decisions.
Governments and bankers hate gold because its supply cannot be inflated on command. They work hard to establish and retain a monetary system under their control that can respond quickly to their demands for inflation — or what today is called "accommodation." World War I provides a tragic case in point.
Making Green by Turning the Countryside Red
The ones who profited from the war had little in common with the men who fought it. The fighting was left mostly to young conscripts, many millions of whom were killed or wounded. The ones who profited knew their way around Washington.
If monetary sovereignty had resided with the market instead of with government, the war would not have been fought. Or if it had started, it would have ended much sooner. Sound money had to die before men could die in such large numbers.
(Excerpt) Read more at mises.org ...
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