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Under a gold standard the sovereign either issues money or borrows money from private hands. Because gold is neither created nor destroyed, only transformed.

The sovereign borrows in order to free hoarded gold for circulation

Under fiat money there's no reason for the government to borrow from the markets. Jake has called sovereign bond yields a subsidy on fmoney hoarding.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Wed Nov 23rd, 2011 at 09:19:57 AM EST
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