Credit Expansion and Contraction of the 1920s and 1930s

In Full Archive by Nathan Lewis

We’re continuing our look at some of the things that have been said about the 1920s and 1930s, particularly regarding monetary affairs. February 7, 2016: Blame Benjamin Strong 2: So Obvious It’s Hard To Believe January 31, 2016: Blame Benjamin Strong December 13, 2015: …

The Simple Simplistic Simplicity Of ‘Nominal GDP Targeting’

In Full Archive by Nathan Lewis

(This item originally appeared at Forbes.com on March 24, 2016.) http://www.forbes.com/sites/nathanlewis/2016/03/24/the-simple-simplistic-simplicity-of-nominal-gdp-targeting/#5a5f8b3e5a44 It really makes some economist-types angry when I say that most economic discussion today is a modern version of Mercantilism. James Denham Steuart is considered the “last of the Mercantilists.” Adam Smith wrote …

The “Price-Specie Flow Mechanism”

In Full Archive by Nathan Lewis

I’ve been revving up to talk about the “price-specie flow mechanism,” which is often ascribed to gold standard currencies in the past, whether as simple coinage only or in the form of gold-based banknotes. January 17, 2016: David Hume, “On the Balance of Trade,” …

The Myth Of ‘Price Instability’ During The Gold Standard Era

In Full Archive by Nathan Lewis

(This item originally appeared at Forbes.com on March 3, 2016.) http://www.forbes.com/sites/nathanlewis/2016/03/03/the-myth-of-price-instability-during-the-gold-standard-era/#c6cb9b040b90 Academics often claim that today’s floating-fiat currency era has much more stable “prices,” at least in the short term (year to year), than the pre-1914 era of gold-based currencies. For example, a February …

The One Chart That Makes People Into Gold Standard Believers

In Full Archive by Nathan Lewis

(This item originally appeared at Forbes.com on February 25, 2016.) http://www.forbes.com/sites/nathanlewis/2016/02/25/the-one-chart-that-makes-people-into-gold-standard-believers/#bfbd490e23c1 There’s one chart that can make some people into instant gold standard converts. No, it’s not this one: It’s this one: This is a graph of British consol bonds, from the resumption of …

Problems of Coinage

In Full Archive by Nathan Lewis

Now that we’ve been bashing the Mercantilist notion that Britain could have a “shortage of silver,” while France has a surplus, while silver can flow freely between the two, let me stop here and say that there really was a shortage of silver coinage …

The Balance of Payments

In Full Archive by Nathan Lewis

We looked before David Hume’s essay “On the Balance of Trade,” from 1742. This essay has become strangely influential, even though it doesn’t really say what people claim it says. Rather, although there is a little confusion in his argument, Hume mostly argues the …

Why So Many Historians Agree With Ted Cruz On Gold

In Full Archive by Nathan Lewis

(This item originally appeared at Forbes.com on February 9, 2016.) http://www.forbes.com/sites/nathanlewis/2016/02/09/why-so-many-historians-agree-with-ted-cruz/#438b96e22e3a Echoing the recent sentiments of Steve Forbes, this week Republican presidential contender Ted Cruz told a group in New Hampshire: Money is … a unit of measurement. So, the reason why we see …

Blame Benjamin Strong 2: So Obvious It’s Hard to Believe

In Full Archive by Nathan Lewis

We’ve been taking a little look at Murray Rothbard’s influential 1962 book, America’s Great Depression. January 31, 2016: Blame Benjamin Strong Some people won’t like me for kicking sand in the face of Murray Rothbard. For them, everything is politics. Rothbard was one of …

Blame Benjamin Strong

In Full Archive by Nathan Lewis

Here’s something I’ve been meaning to get to for a long time. Let’s look at the description of the supposedly disastrous “inflation” of the 1920s, as described by Murray Rothbard in America’s Great Depression (1962), and see if it makes any sense at all. …