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Leland Yeager, an advocate of freely fluctuating fiat money, concedes that a 100 percent gold standard would end reserve drains, forced contraction, and balance-of-payments anxiety—problems he attributes to fractional reserves rather than to gold. Rothbard quotes him at length, asks why he rejects what he has just praised, and pushes the reductio further: where exactly is the geographical boundary of a money?

The standard objections, taken in turn. If banks could not profit under 100 percent reserves, they may charge for their services as every other useful business does. And the fear of an inadequate money supply misses the classical lesson that any change in the quantity of money adjusts itself in purchasing power—leaving population, trade volume, and a stable price level as arbitrary criteria.

The cardinal difference between Rothbard and most other gold advocates. He rejects the Chicago School’s view of 100 percent reserves as a convenient tool for managing the money supply, grounding his case instead in property rights: notes and deposits are warehouse receipts, and issuing more than the goods on hand is legalized counterfeiting. He answers Spahr’s bridge analogy and weighs the attractions of free banking.

Why governments prefer money creation to taxation: the benefits are plain to whoever receives the new money first, while the losses stay hidden from everyone else. Rothbard traces how the two natural checks on a bank—redemption by outsiders and a run by its own clients—were widened by central banking, by suspensions of specie payment, and by campaigns to shame the public out of using gold day to day.

Statistics can be interesting and informative, but only if one can properly understand them through sound economic theory.

Original article: https://mises.org/mises-wire/inflation-and-statistics-economics-explains-them-not-other-way-around

Rothbard argues that 1931–33 was the last step in a long process rather than a sudden break. Government’s compulsory monopoly of coinage came first, defended by fears of private fraud that the long record of official debasement makes hollow. He answers the Gresham’s Law objection, then traces how the royal stamp shifted emphasis from a coin’s weight to its name.

The conceptual core of the essay. Rothbard answers the charge that gold advocates want government to fix a price by rejecting its premise—“dollar” was never an independent entity but a name for a weight of gold. He shows how money is properly obtained only through production, and argues that a bare name could never have arisen as money on a free market.

Rothbard declines both the fashionable dismissal of gold and the restorationist call to return to the pre-1933 standard, which he judges too far decayed to have lasted. He then states his ethical premise plainly: the free market, extended to money itself. Against the claim that money is whatever government says it is, he warns that command of the unit of account is command of the whole society.

Writing in 1991, Rothbard sets the essay in its original context: Bretton Woods as an international dollar standard masquerading as a gold standard. He contrasts it with the classical pre-1914 system, in which every currency was a defined weight of gold redeemable on demand, then recounts how the breakdowns of 1968 and 1971 tested Misesian predictions against an Establishment certain that gold would fall to $6 an ounce.

Last week, more than 50,000 people illegally entered the Spanish exclave city of Ceuta, which normally has a population of only 80,000. Why not just open the border permanently? 

Original article: https://mises.org/mises-wire/what-would-happen-if-spain-had-open-border-morocco