Hi, Jay. You sure know how to have fun.
As for me, I am sitting on a wooden bench, well-polished by countless flannel-clad behinds, while I listen to Keynes and various members of Parliament grill the Governor of the Bank of England (Norman) about "where did the money go?" circa 1931. (Macmillan Committee on Finance and Industry.)
Norman hasn't yet admitted that the Bank of England deliberately deflated the money supply in order to maintain the prewar price of gold, but he may yet, and if he doesn't, he should, because he did.
The Federal Reserve did it, too, as Milton Friedman and Anna Schwartz demonstrated a long time ago, but they didn't have access to the secret documents of the Bank of England, which were made available to the official biographer (do institutions have biographers?) of the Bank of England, Sayers, in 1976, that shows that Norman hid a lot of gold, 48 million English pounds worth, off the books in order to keep deflating, during the time that (1927-1928) Austrians say that money was too easy, because they look at interest rates, not money in circulation.
Everyone knows that inflating the money supply makes prices go up. And everyone knew that during the Great Depression, prices were spiraling down, starting months before the stock market crash in 1929. But nobody seems to have understood that deflating the money supply makes prices go down, or that deflation can feed on itself.
I am practically wetting myself with excitement. |
