The Supply of Money

I finished reading Ron Paul's Revolution a few weeks ago and it was a great book. In fact, I have an entirely new appreciation for Ron Paul as a result. The only thing that really bothered me about his policy recommendations was a return to the gold standard.

Since then, I have done a lot of reading on inflation and the gold standard and I am again leaning towards changing my position. Originally I thought our economy was too complicated for this type of monetary system, but then again I think I was wrong.

I am more and more convinced that Americans cannot rely on the Fed to control inflation. There is too much pressure from Congress to make new credit cheap, thus increasing the supply of money and triggering inflation (the very short version of the story). The temptation by the government to print money to pay for programs is a something our hedonistic Congress cannot resist.

A good article at Mises.org today helps make the case. Plus, these videos are very good to get another perspective.