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Toxic: Good point about not being able to assume contradictory things at the same time. I was (in making the assumption of 100% reserve banking and no government interference) trying to limit the question to that of an expansion of the gold supply, but maybe that won't work, not in free economy anyway!
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That's what I thought -- in the short run. But in the longer run, I would have put something into the economy that is (at least) more valued than paper money., somethng that adds real value to the economy and does not depreciate like paper money. I think the next post by "Bogart" is a good explanation.
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OK, I think I understand, but [always wait for the "but . . . ], suppose I am the discoverer of the mountain of gold, and I take it to the mint and have made into gold coins, and then, spendthrift that I am, I go into the free market and start buying up everything I can. Wouldn't that have the same effect on the economy that the a government
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I have been reading Mises on Money, Rothbard's Mystery of Banking, and other similar works. And now I have a question that I have not been able to figure out an explanation for. Hence, this question, defined as carefully as I can: Assume a 100% gold standard with no fractional-reserve banking. Also assume a government committed to no interference