Austin Petersen Changed My Mind On Monetary Policy

Introduction

Hello, people! I watched an Austin Petersen YouTube video from back when he was running for president and he explained this thing free banking.

I used to favor a return to the Gold Standard, but then Petersen explained something I think I should have figured out on my own:

  • Government cannot be trusted to uphold the Gold Standard, and that was proven to some extent under FDR and in full under Nixon.

My Support for Gold Standard

I first learned about the Gold Standard in 2012 from the site iSideWith and their question on Financial Regulation. I asked “What’s this Gold Standard?” and looked into it and found out that it is the idea that government cannot print more money, or less money, than it has in gold reserves. It made mathematical sense to me and thus my support for it began.

Free Banking

From what I learned this morning, free banking refers to a system wherein the force of Supply And Demand controls what amount of banknotes and deposits can be sustained by any stock of cash revenues. And there is some compatibility with the Gold Standard I hear, which I consider a good thing as the Gold Standard has proven to keep inflation under control.

However, pure free banking means that there is no role for a central bank. Instead banks can print their own banknotes and be subservient only to the nature of Supply and Demand.

Believe it or not, the big banks despise this idea of free banking (and many might lie about why) because then they know that means they can go out of business if they do something fraudulent or coercive. Free banking also means they can go out of business by extending themselves outside of their supply stock.

National corporations also despise anything  free market, including free banking. Because then that means banks and businesses can and will rise and fall accordingly with the most organic economic force on Earth: Supply & Demand.

What Causes Economic Fail?

Corporate Welfare and centralized banking, these are the elements making big banks and big businesses to big to fail, what economic hardships people are suffering is a result of Keynesian economics, which is all wrong – this economic field says for government to keep on spending, spending, and spending money it may or may not have to prevent any banks or businesses from failing. I do hope everyone reading this can see the fallacy with Keynesian economic policy.

Conclusion

Well, folks. That is all I have this morning, and thank you Mr. Petersen for expanding my monetary policy view to include addressing all banking problems and not just addressing inflation alone. Thanks all around,

~LDA

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