Honest Money - Gary North

[Pages:185]HONEST MONEY

HONEST MONEY

The Biblical Blueprint for Money and Banking

Gary North

LvMI

MISES INSTITUTE

More information on biblical economics can be obtained from . See the section, Capitalism and the Bible.

Copyright ? Gary North, 1986, 2005 Copyright ? 2011 by the Ludwig von Mises Institute and published under the Creative Commons Attribution License 3.0.

Ludwig von Mises Institute 518 West Magnolia Avenue Auburn, Alabama 36832

ISBN: 978-1-61016-193-0

TABLE OF CONTENTS

Introduction

vii

1. The Value of Money

1

2. The Origins of Money

17

3. Maintaining Honest Money

31

4. Debasing the Currency

45

5. The Contagion of Inflation

55

6. When the State Monopolizes Money

67

7. Biblical Banking

81

8. Fractional Reserve Banking

95

9. Protecting the Counterfeiters

109

10. A Biblical Monetary System

127

Conclusion

141

Bibliography

151

Index

155

INTRODUCTION

This is a book about money, a subject that has defied analysis by professional economists for as long as there have been professional economists. At the same time, it is a topic for which the most ill-informed people think they have the answers. Very often the most ill-informed people are professional economists.

I will give you an example. In the fall of 1985, I suggested to a research assistant to a Congressman that he conduct a quick study of the Mexican peso. I thought that the sharp increase in cash--American money in circulation--might be explained by Mexican nationals substituting dollars for pesos in Mexico. At the time that he began his investigation, the peso was selling for about 250 per dollar. I suggested that he ask a staff economist at the Federal Reserve System, our nation's central bank, if he thought that Mexicans were hoarding cash dollars. I suspected that Mexican citizens were using the U.S. dollar as a substitute for the collapsing peso.

He phoned back a few days later. Two staff economists, one of whom was a specialist in the Mexican economy, had told him that it was quite unlikely that Mexicans were hoarding dollars, because Mexicans could

vii

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