Paper Money Collapse : The Folly of Elastic Money and the Coming Monetary Breakdown

by Schlichter, Detlev S.

• ISBN13: 9781118095751
• ISBN10: 1118095758
• Format: Hardcover
• Copyright: 2011-09-21
• Publisher: Wiley

Summary

In an engaging style based on extensive research, Paper Money Collapse shows conclusively why paper money systems - monetary systems that are based on an elastic and constantly expanding supply of money (such as our system today) as opposed to a system of commodity money of essentially fixed supply - are inherently unstable and why they must lead to economic disintegration. All paper money systems in history ended in failure. The book shows why this must be the case and why it will also be the fate of the present system. The conclusions are controversial as they go against the present consensus, which holds that elastic state money is superior to inflexible commodity money (such as a gold standard), and that expanding money is harmless or even beneficial for as long as inflation stays low. The book shows that the present crisis is the unavoidable result of continuously expanding fiat money, that the current policy of accelerated money production to 'stimulate' the economy is counterproductive and that, if pursued further, it will lead to a complete collapse of the monetary system. Paper money systems are confidence games. When the public realizes that the printing press is increasingly used to keep states and banks solvent, this confidence will evaporate quickly. The endgame will then be sovereign default, hyperinflation and economic chaos.

Author Biography

DETLEV S. SCHLICHTER is a writer and Austrian school economist who has spent nearly twenty years working in international finance, including stints at Merrill Lynch, J.P. Morgan, and Western Asset Management. In his career, Schlichter has overseen billions in assets for institutional clients around the globe.

Table of Contents

Foreword	p. xi
Acknowledgments	p. xv
Prologue: The Brave New World of Elastic Money	p. 1
The Basics of Money	p. 19
The Fundamentals of Money and Money Demand	p. 21
The Fundamentals of Fractional-Reserve Banking	p. 49
The Effects of Money Injections	p. 83
Money Injections without Credit Markets	p. 85
Money Injections via Credit Markets	p. 97
Fallacies about the Price Level and Price Level Stabilization	p. 125
Common Misconceptions Regarding the Price Level	p. 127
The Policy of Stabilization	p. 149
History of Paper Money: A Legacy of Failure	p. 161
A Brief History of State Paper Money	p. 163
Beyond the Cycle: Paper Money Collapse	p. 171
The Beneficiaries of the Paper Money System	p. 173
The Intellectual Superstructure of the Present System	p. 185
Beyond the Cycle: Paper Money's Endgame	p. 221
Epilogue: A Return to Commodity Money	p. 241
Notes	p. 247
About the Author	p. 259
Index	p. 261
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