Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
No, it is because if you peg your money to a real resource (be it gold, oil, carbon, or entropy) you allow society to potentially generate credit claims to more real resources than can actually exist (and, based on past experience, this potentiality will eventually be realised) which is then followed by a debt-deflation cycle when the bubble pops.

Fiat money allows such nonsense to be inflated away (which is why inflation-indexed debt is as systemically risky as especie pegs).

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

by Migeru (migeru at eurotrib dot com) on Fri Jul 20th, 2012 at 08:57:25 AM EST
[ Parent ]

Others have rated this comment as follows:

Display:

Top Diaries

Impeachment gets real

by ARGeezer - Jan 17
24 comments

A Final Warning

by Oui - Jan 10
112 comments

Environment Anarchists

by Oui - Jan 13
4 comments

More Spanish repression

by IdiotSavant - Jan 6
8 comments

Occasional Series