Patrick Barron on U.S. competitiveness and need to return to the gold standard

As long as America can print fiat money to pay for imports it will print fiat money.  But under the discipline of the gold standard, Americans will have to produce good quality products at world market prices in order to earn the foreign exchange (gold) needed to settle international trade.  It’s the only way. Erecting tariffs, as desired by President Trump, solves nothing and merely exacerbates the situation.  America must learn to compete in the world on equal terms; i.e., it cannot simply print fiat dollars.  It must produce goods that foreigners wish to buy at prices that foreigners are willing to pay.  Becoming an autarkic nation, a la North Korea, will condemn Americans to poverty.  America needs to become an honest, commercially oriented nation.  If not, the world will pass it by just as has happened to other great nations in the past. 

~ Patrick Barron, "David Hume’s Insight Explains America’s Economic Decline," Going Postal, April 16, 2025

Kevin Duffy on gold

“Gold,” says Jim Grant, “is not so much an inflation hedge as an investment in monetary disorder.”  Havoc is the unfortunate consequence of creating money out of thin air in a desperate attempt to let governments spend more than they take in.  Expenditures on war and luxury, and popular support for their continuance, are the genesis of all fiat money experiments, past and present. 

The tidal wave of extravagant spending in response to Covid got its start under the Trump administration and continued under Biden.  That both men, well over the retirement age, are vying this November to influence the federal purse strings is not lost on goldbugs.  Frugality is not on the ballot.

~ Kevin Duffy, "Gold's Epic Breakout," The Coffee Can Portfolio, April 15, 2024

Janet Yellen on how fiat currencies are different than cryptocurrencies

Stephen Colbert: Does crypto make sense to you, and on this level?  People like Ron Paul would say, after the United States dollar went off of the gold standard, under Nixon, I believe, that we're now a fiat currency.  Things are worth what they're worth because we said that it's worth something.  "It's backed by the full faith and credit of the United States," whatever that particular phrase, that term or art, may mean.  And so, is crypto, where I create a widget that spits out a coin that I declare a value and then that number of those sets a capitalization for all that crypto out there and then people get invested, so that $20 million now, people say, "oh, that's worth $100 million," and all of that is created out of nothing.  Does that make sense to you, because there is no inherent value to the actual item itself?

Janet Yellen: I've been pretty skeptical at the outset about what the value of crypto would be to the real economy.

Colbert: But because the United States has a fiat currency, is the dollar make any more sense to you than crypto does?

Yellen: Yes, the dollar makes a lot of sense to me.

Colbert: Why?

Yellen: Because it's a natonal currency, it's well-regulated by the Federal Reserve, it has a clear mandate and people who are accountable to the public and to Congress to maintain the goals of the Fed, which is maximum employment and low and stable inflation, price stability.

~ Janet Yellen, appearance on The Late Show with Stephen Colbert, 6:20 mark, December 1, 2022

Johh Hathaway on the great monetary experiment

The consituency for sound money is all but vanished. 

~ Johh Hathaway, co-portfolio manager, Sprott Gold Equity Fund

Daniel Webster on fiat money

Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.

~ Daniel Webster, as quoted by Andrew Dickson White, first president of Cornell University, in Fiat Money Inflation in France, p. 69

Daniel Webster,
1902-1903

Lord Liverpool on paper money

The tendency of an inconvertible paper currency is to create fictitious wealth - bubbles - which, by their bursting, create inconvenience. 

~ Lord Liverpool, 1818

(This comment was made "on the eve of Britain's returning to the gold standard after the paper money interlude of the Napoleonic wars," according to Jim Grant.  Grant cited this quote during his podcast on September 26, 2020.)

George Bernard Shaw on the gold standard

You have to choose (as a voter) between trusting the natural stability of gold and the honesty and intelligence of members of government. And with due respect for these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.

~ George Bernard Shaw, playwright and novelist, 1856-1950

Thomas Jefferson on the dangers of fiat money

That paper money has some advantages, is admitted. But that its abuses also are inevitable, and, by breaking up the measure of value, makes a lottery of all private property, cannot be denied.  Shall we ever be able to put a constitutional veto on it?

~ Thomas Jefferson

Thomas Jefferson
1879

Tony Deden on money debasement

Dishonest money begets dishonest statistics, dishonest accounting, dishonest balance sheets, dishonest means, dishonest objectives, dishonest compensation policies, and dishonest relationships; that it begets ambiguousness and corruption in every aspect of life.

~ Tony Deden, "Investment value in an age of booms and busts: a reassessment," Grant's Fall Conference in New York, October 9, 2018

Lord Liverpool on fiat money and asset bubbles

The tendency of an inconvertible paper money is to create fictitious wealth, bubbles, which by their bursting, produce inconvenience.

~ Robert Banks Jenkinson, Lord Liverpool, British statesman and Prime Minister (1812-1827), House of Lords speech, May 26, 1818

Jim Grant on the Hell that negative interest rates hath wrought

Dogmatism is foolish in this time of unprecedented wonders, but there's no law against opinions.  Here is our first opinion.  Because negative interest rates do not conform to human nature, as [Irving] Fisher demonstrated and common sense concurs, the market did not spontaneously produce them.  The central banks finagled them.

We have more opinions:

• The evil fruit of artificially low interest rates (even slightly positive ones) is an eventual financial crisis.
• Crisis will lead to still more central bank activism and, finally, to a loss of confidence in money itself.

~ Jim Grant, "The best economist on the lowest rates," Grant's Interest Rate Observer, July 26, 2019

Anthony Deden on confusing money printing with wealth creation

Frankly, we now have two generations of economic agents who are entirely ignorant about the nature of money. We welcome rising prices and see them as wealth even as they are merely the result of inflation. We demand more cash to save the system, instead of allowing those who fail to go bankrupt, so that more efficient competitors can emerge. We have tolerated the Swiss National Bank sale of our gold reserves in exchange for American paper money and promises.

We demand cheaper currency to stay competitive because we do not know the true nature of competitiveness. If cheaper currency is the source of wealth, where has Bangladesh gone wrong? If cheaper money means economic prosperity, why not just print as much as we can and give it out to everyone? We have become fools. The customers know nothing and the advisers know even less. And then we have the idiot economists—the neo-classical, Keynesian variety with solutions to problems they did not even anticipate; solutions that have, in fact, long been discredited. And so we lurch from crisis to crisis—eating our meager capital in the hopes of becoming rich in money. It’s a pity.

~ Anthony Deden, "Reflections on the Role of Gold in Investment Practice," November 19, 2009

Hans Hermann-Hoppe on fiat money

More paper money cannot make a society richer, of course — it is just more printed paper. Otherwise, why is it that there are still poor countries and poor people around? But more money makes its monopolistic producer (the central bank) and its earliest recipients (the government and big, government-connected banks and their major clients) richer at the expense of making the money's late and latest receivers poorer.

~ Hans Hermann-Hoppe

Jim Grant on fiat currencies

We’re on the long, winding road to confetti—to the discrediting of fiat currencies. That is the end game. Adam Smith cautioned against being excessively bearish. One shouldn’t be dogmatic about when things will happen. But we’re on the road to an important perception that central bankers don’t have the answers and are in fact in the process of discrediting the very money they are meant to protect. I would be short the Ph.D. standard, long the periodic table.

~ Jim Grant, "Jim Grant Is Bullish on Gold, Bearish on Kraft," Barron's, August 1, 2016

Guido Hülsmann on how money printing is not the source of wealth

The classical economists had rejected the notion that overall monetary spending — in current jargon: aggregate demand — is a driving force of economic growth. The true causes of the wealth of nations are non-monetary factors such as the division of labor and the accumulation of capital through savings. Money comes into play as an intermediary of exchange and as a store of value. Money prices are also fundamental for business accounting and economic calculation. But money delivers all these benefits irrespective of its quantity. A small money stock provides them just as well as a bigger one. It is therefore not possible to pull a society out of poverty, or to make it more affluent, by increasing the money stock. By contrast, such objectives can be achieved through technological progress, through increased frugality, and through a greater division of labor. They can be achieved through the liberalization of trade and the encouragement of savings.

~ Jörg Guido Hülsmann, "Why the Austrian Understanding of Money and Banks Is So Important," Mises.org, February 18, 2015

Hans Sennholz on fiat money

The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register.

~ Hans F. Sennholz

Thomas Jefferson on banking and paper money

Although all the nations of Europe have tried and trodden every path of force and folly in a fruitless quest of the same object, yet we still expect to find in juggling tricks and banking dreams, that money can be made out of nothing, and in sufficient quantity to meet the expense of heavy war.

~ Thomas Jefferson, as quoted in G. Edward Griffin, The Creature from Jekyll Island, page 338

Alexander Hamilton on Fiat Money

To emit an unfunded paper as the sign of value ought not to continue a formal part of the constitution, nor ever hereafter to be employed; being, in its nature, repugnant with abuses and libel to be made the engine of imposition and fraud.

~ Alexander Hamilton, as quoted in G. Edward Griffin, The Creature from Jekyll Island, page 316

Alexander Hamilton Bicentennial
1757-1957

Thomas Jefferson on banking and paper money

I have ever been the enemy of banks; not of those discounting for cash [that is, charging interest on loans of real money], but of those foisting their own paper into circulation, and thus banishing our cash. My zeal against these institutions was so warm and open at the establishment of the bank of the U.S. that I was derided as a Maniac by the tribe of bank-mongers, who were seeking to filch from the public their swindling and barren gains. ... Shall we build an altar to the old paper money of the revolution, which ruined individuals but saved the republic, and burn on that all the bank charters present and future, and their notes with them? For these are to ruin both republic and individuals. This cannot be done. The Mania is too strong. It has seized by its delusions and corruptions all the members of our governments, general, special and individual.

~ Thomas Jefferson in a letter to John Adams in 1814

(Quoted by G. Edward Griffen, The Creature from Jekyll Island, page 341.)

George Washington on paper money

We may one day become a great commercial and flourishing nation. But if in the pursuit of the means we should unfortunately stumble again on unfunded paper money or similar species of fraud, we shall assuredly give a fatal stab to our national credit in its infancy.

~ George Washington

(Quoted by G. Edward Griffen, The Creature from Jekyll Island, page 323.)