The world market had been shaken by a series of financial crises, and the economy of Japan had fallen into a persistent deflationary state, When Ben Bernanke gave his 2002 speech before the National Economists Club, “Deflation: Making Sure “It” Doesn’t Happen Here”. Bernanke was going to explain to his [...]

So I am spending a week or so trying to understand Ben Bernanke’s approach to this crisis based on three sources from his works. In this part, the source is an essay published in 1991: “The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison”. In [...]

This is very geeky, sorry. I posting it because I intend to revisit it sometime in the near future in the context of a review of the Euro-zone crisis. My post on Moseley’s MELT paper (pdf) argues the so-called “price of gold” is actually the standard of price for a [...]

I find it amazing that people will demand Washington create work, but will not demand freedom from unnecessary work created by Washington. The fixation on work is the principal lever of the fascist state. But, the fixation on work is only a reflex of the role fascist state issued currency [...]

I apologize for this part of the series, because it is hopelessly geeky. Unfortunately, I see no way to move forward without getting into the weeds of Marx’s unique contribution to the theory of money at this point. Please bear with me on this. As I really need to explain [...]

“The mode of production is in rebellion against the mode of exchange.” – Frederick Engels, Socialism: Utopian and Scientific, 1880 Krugman confuses the superficial relations of exchange for a deeper analysis of the capitalist mode of production. This failing might help him when he wishes to ignore the likely results [...]

I have a simple hypothesis for how Krugman managed to reach the correct conclusion regarding the relationship between the price of gold and the general level of economic activity: he probably started with his conclusion and tried to work backward. He needed an argument for why the rising price of [...]

Paul Krugman manages to stumble Mr. Magoo-like to his analytical destination through a series of comical errors. Krugman’s argument on gold and deflation is actually an argument on gold and depressions. Krugman begins by explaining that rising gold price has been popularly linked to the prospect of inflation created by [...]

I have been critiquing Barry Eichengreen’s unprincipled attack on Ron Paul and his demand for a return to the gold standard, but, so far, I have danced around the real question posed by this vicious hit piece. Eichengreen’s argument is not about whether or not Ron Paul’s ideas can be [...]

    Barry Eichengreen makes much of the role the theories of Friedrich Hayek play in Ron Paul’s world view for a reason that becomes immediately clear: In his 2009 book, End the Fed, Paul describes how he discovered the work of Hayek back in the 1960s by reading The [...]

Washington has a problem, and Barry Eichengreen is doing his bit to save it. The problem’s name is Ron Paul, and this problem comes wrapped in 24 carat gold: GOLD IS back, what with libertarians the country over looking to force the government out of the business of monetary-policy making. [...]

In part one of this series, I showed how inflation affects not only consumption but also production. In the former, inflation expresses itself in the fall of the consumption power of the mass of society. In the latter, inflation expresses itself as a fall in the actual realized rate of [...]

According to the Wikipedia entry on Executive Order 6102, the fine for hoarding gold was ten thousand dollars. At the same time, the executive order demanded all private holdings be turned in and exchanged for government issued ex nihilo dollars at an exchange rate of $20.67 per troy ounce of [...]

In the bare bones sketch of Marx’s theory I argued that the value of the object serving as money played no role in its function as money. This was incomplete, of course, but it served to advance my argument until I could directly address the implication of debasement of money [...]

The Wikipedia definition of inflation includes this rather silly statement on the definition of the so-called “real value” of money: …inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. [...]