Recommended reading: Nominal GDP targeting & Signs Of The Gold Standard

A selection of interesting articles from around the web…

The fallacy of nominal GDP targeting

Detlev Schlichter has written an excellent piece explaining why the policies being pursued by our central banks will “ultimately end in hyperinflation when the public loses confidence in this charade”.

From the article:

“Repeated attempts over the past decades to buy near-term economic growth at the price of persistent marginal debasement of money has now left us with such a distorted and over-indebted economy that any further monetary expansion has to be ever more scarily aggressive to even cut through the thicket of accumulated imbalances and have any effect on inflation and GDP”

Read the article in full…

Signs Of The Gold Standard Are Emerging From Germany

As we have written about many times (most recently here), there is a gradual realisation within the financial world that today’s paper currencies are fatally flawed and that the ultimate form of money is in fact gold.

This is an important trend, and it’s one that until recently has been all but ignored by mainstream media. Now however, Forbes has published an article cataloguing some of the recent evidence that, “Green shoots of respect for the classical gold standard are beginning to pierce the decaying concrete of Neo-Keynesianism monetary theory all over the world.”

From the article:

“Gold is not really a commodity at all. While it is included in the commodities basket it is in fact a medium of exchange and one that is officially recognised (if not publicly used as such). We see gold as an officially recognised form of money for one primary reason: it is widely held by most of the world’’s larger central banks as a component of reserves. We would go further however, and argue that gold could be characterised as ‘‘good’’ money as opposed to ‘bad’ money which would be represented by many of today’s fiat currencies.”

Read the article in full…

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