Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: kevao

I quite agree. I was merely responding to the claim that “inflation can’t occur” with a gold-based economy.

It certainly can, although the physical constraints you mention mean it can never get as bad as it can with fiat money.

European countries all thru the middle ages and early modern periods had, sorta, metal-based currencies. When they wanted to inflate, they called in the currency and recoined it, alloying the gold or silver with more base metals. Or they could make the coin smaller while claiming it was still the same coin. The effect either way differed little from printing more paper money.

During most of the Roman Republic coins were almost pure silver. By the time of the Emperor Galerius (260) coins were <5% silver and the empire’s economy was disintegrating.


37 posted on 01/04/2011 11:38:09 AM PST by Sherman Logan
[ Post Reply | Private Reply | To 29 | View Replies ]


To: Sherman Logan
The effect either way differed little from printing more paper money.

Yes, some things just never change, like government ripping off the citizenry via currency debasement.

43 posted on 01/04/2011 12:13:22 PM PST by kevao
[ Post Reply | Private Reply | To 37 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson