By
Monty Pelerin, posted January 29th, 2010 http://www.economicnoise.com/2010/01/29/bonner-on-money/
For
those who want to understand more about money and inflation, the
following piece by Bill Bonner of the Daily Reckoning is good reading.
The Descent of Money
By Bill Bonner
Paris, Fance
Science and technology have produced many wondrous breakthroughs.
But there are some things it cannot improve. A kiss from natural lips
is still the lover’s choice. Baby formula proved no match for the real
thing. Ersatz money is a flop too. That last item is not so much a fact
as a prediction.
The first modern competition between gold and paper money ended like the pre-modern ones. Gold won. Herewith, a short summary:
A rogue, John Law, was the protagonist of the story. He killed Beau
Wilson in a duel. Then, he went on the lam…first to Scotland…then to
Amsterdam…and finally to Paris. Like Alan Greenspan or Ben Bernanke, he
made himself useful to people in high places – in this case the Duke
d’Orleans, who needed money. Law had a way to get it:
“I have discovered the secret of the philosophers’ stone,” he is said to have remarked, “it is to make gold out of paper.”
Continue reading Bonner on Money