Customer Reviews

Free Banking and Monetary Reform

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Nice book. Recently, gold-buts are braying about the yellow metal, unaware that preserving the value of a Ben Franklin in monetary formaldehyde is poison on a modern economy. Especially one that has undergone a real estate bust.

Japan has tried tight money for 20 years--the yen has appreciated against all other currencies and in Japan there is deflation--but Japan's economy has been floundering against the roaring Chinese and Korean economies (where monetary growth is practiced). Japan is on the verge of becoming a backwater nation, its investors dispirited, and its population failing to reproduce. Property values have fallen 80 percent in the last 20 years and are still falling, as the Bank of Japan sallies forth against inflation. The Nikkei Dow has lost 75 percent.

Ben Bernanke should listen to Milton Friedman and print more money.

Glasner wrote a 1995 UCLA working paper talking about how stupid it was for the U.S. to stay on the gold standard during the depression. He argued that deflation occurred due to Smoot-Hawley, making it hard for Germany to repay its WWI debts in trade, and thus had to use gold. He then postulated that the depression could have been avoided had the US moved off the gold exchange standard. Of course, repudiating gold so soon after setting up the gold exchange standard in the Genoa conference of 1923 would have revealed the U.S. to be completely without scruples with regard to its own currency. Glasner could have equally argued for Germany to repudiate its war debts, but he did not. Evidently Glasner feels world trade operates by creditors inflating their currency, so that if debtor's debt is denominating in the creditors' currency it makes it easier to pay it off. He misses the point that the gold standard, while exacting harsh discipline on ill-advised debtors, stablizes the belief in the value of the currency for all participants. Glasner is searching for the painless correction, and he does so by sticking his hand in your pocket.