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Friday, August 29, 2014

The Myth of the Unchanging Value of Gold - Joseph T. Salerno - Mises Daily

The Myth of the Unchanging Value of Gold - Joseph T. Salerno  breaks down the importance of having a commodity based monetary standard.



An Excerpt from the article:



"When money is conceived as a measure of value, the policy implication is that one of the primary objectives of the central bank should be to maintain a stable price level. This supposedly will remove inflationary noise from the economy and ensure that any changes in money prices that do occur tend to reflect a change in the relative values of goods and services to consumers. Thus, for mainstream economists, stabilizing a price index based on a basket of arbitrarily selected and weighted consumer goods, e.g., the CPI, the core CPI, the Personal Consumption Expenditure (CPE), etc., is a prerequisite for rendering money a more or less fixed yardstick for measuring value."

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