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To: Don Lloyd who wrote (408)	2/16/2002 9:31:24 AM
From: Ilaine	Read Replies (1) \| Respond to of 443

I read the Salerno paper. Thought it was interesting. Will skim Rothbard. Salerno left out this one, I think: Rising prices reduces the incentive to mine gold - because it's more expensive to mine gold. Reduction in gold mining reduces increase in gold supply. For countries on the gold standard, reducing increase in gold supply reduces growth of money supply. Reducing growth of the money supply causes price deflation. Falling prices increases the incentive to mine gold. Increase in gold mining increases the gold supply, which increases the money supply, which causes prices to rise. Repeat at lib.