Is It Time to Sell Off Fort Knox?

August 31st, 2010 at 6:12 am | 38 Comments |

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Ron Paul has said that he wonders if there’s gold in Fort Knox and says he’ll introduce legislation demanding an independent audit of the government’s gold reserves. The audit is unnecessary and, even if it were a good idea, the entire 8,133.5 tons of gold the government keeps on hand is an anachronism.  In the long term, the country should study it.

An independent audit is unnecessary because there’s simply no evidence that the government has sold any gold without disclosing it. Gold prices sit near record highs and the United States government is the largest holder of gold in the world by a significant margin.  Given that the United States holds about $317 billion worth of gold valued at the current price of around $1,200 an ounce, any significant sale of the reserves would have depressed prices. Instead they’ve risen.  Even if the government had somehow sold the gold, it seems nearly impossible that its physical custody could have been transferred to someone else without a lot of people noticing. (In private sales, physical custody rarely changes hands.)

In any case, the reasons for the United States to continue holding so much gold seem a little anachronistic. The country’s practice of maintaining the world’s largest  gold reserves began after World War II when, under the Bretton Woods system of fixed exchange rates, the United States let other nations redeem dollars for gold at a set price. The entire system existed to establish fixed exchange rates between the world’s major currencies. But it never worked particularly well and underwent a number of revisions (most prominently in 1968, when the price of gold was allowed to float.) In 1971, the Nixon administration ended all government-backed convertibility to gold and let the dollar float freely in international markets. By the mid-1970s, all other major currencies floated as well. But the dollar remained the single largest form of foreign exchange reserves for most of the world’s economies and, therefore, a de facto world currency.

In theory, the ability of the government to redeem some outstanding dollars for gold undergirds this system and the continued (although weakening) status of the dollar as the world’s reserve currency. The dollar’s widespread holding in reserves, in turn, increases the value of dollars and lets the United States run higher budget and trade deficits than it otherwise could.  But the relative strength of the U.S. economy and military has a lot more to do with this than holdings of gold: $317 billion, after all, is only about 2 percent of the U.S. GDP.

With a lagging economy, the United States probably does need to hang onto most of its gold. A flight of other countries from the use of the dollar as a reserve currency—which could happen—would simply cause too many problems. In the longer term, however, economists should look into the wisdom of keeping the gold reserve.

Gold, after all, is basically an economic sucker bet. It has only a handful of industrial applications and most of the world’s gold is in jewelry. Unlike  modern currencies (which are backed by national economies) and even other commodities (oil, aluminum, coal) with industrial applications  gold really has value only because people pretend that it does. It can’t be used directly to make much of anything or to buy goods.  Even if the U.S. holds on to some form of commodity-based reserve, it’s unlikely that 70 percent of it should exist in the form of gold.

In short, there’s no reason to audit the U.S. gold reserves. In the long term, however, the country may want to consider getting rid of them.

Recent Posts by Eli Lehrer



38 Comments so far ↓

  • midcon

    Questioning whether the government secretly got rid of the gold in Ft. Knox is the kind of thought that devalues other aspects of Ron Paul’s platform. It’s no different than when the birthers question Obama’s citizenship, which serves to decrease Republicans credibility. Sort of shooting one’s self in the foot.

    That said, the gold in Ft Knox is already there. The infrastructure is already in place to maintain it and the cost is simply the O&M (operations and maintenance) cost to secure the gold, maintain the vault and perform administrative tasks. If we did not already have the gold there, one could and should question whether the cost of a Ft Knox is warranted. However, since it is already there, the cost of maintaining is offset by the value of having it. That value is simply the perceived economic stability provided by the hedge against economic collapse represented by the gold.

    In summary, if we did not already have it, then we should question if we need it. But since we already have it, that point is moot if even if the value is only perceived. Remember Ft. Knox (the fort not the vault) has other missions and would continue to exist regardless of the gold.

  • TJ Parker

    This nutty thesis has been around since the Clinton years, together with complaints that Goldman Sachs manipulates the gold market.

  • bubba11

    I’m completely ignorant of the gold trading thing, and have always wondered why people buy gold, except to sell it later at a higher price. Holding onto it doesn’t make any sense to me. If the economy does really tank, what are all these people with their gold gonna do with it? I certainly wouldn’t take it as a trade for anything that might actually be useful, like food.

  • WillyP

    Says Mr. Lehrer,

    “Gold, after all, is basically an economic sucker bet. It has only a handful of industrial applications and most of the world’s gold is in jewelry. Unlike modern currencies (which are backed by national economies) and even other commodities (oil, aluminum, coal) with industrial applications gold really has value only because people pretend that it does. ”

    So the metal that has served as humanity’s money for, oh, 25-30 centuries, only has value because “people pretend that it does.”

    You don’t need to support a gold standard to realize how patently ridiculous that statement is. I quote myself:

    “[Different forms of money] also share some other qualities, in varying degrees, relating to their status as money: they are commodities (i.e., they are measured by weight); they are easily divisible; they are commonly desired; and, importantly, they have high economic utility relative to their weight. Now, ask yourself whether paper, currently the money medium for this country and all the industrialized world, shares these qualities. No, it does not; it lacks, critically, a high economic utility….

    In theory at least, you can have a paper currency managed by government that will function perfectly well and indefinitely. The addition of the characteristic of high utility – of actual worth – to the list that defines good money seems to be out of practical wisdom rather than strict economic necessity. While the revival of the classical gold standard is a political non-plus to most voters, the public should be aware that the Federal Reserve must act within strict boundaries if we are to avoid destabilizing boom-busts.”

  • sinz54

    Gold, after all, is basically an economic sucker bet.
    I invested in gold in 2003, when it was $340/ounce. Now it’s over $1200/ounce. It’s about the only thing in my portfolio that has outpaced the S&P 500 stock index by a wide margin.

    If you look at how much gold it takes to buy a consumer item like a man’s suit, you’ll find that it takes no more gold to buy it today than it did 100 years ago. That’s despite 100 years of inflation. Gold has kept its value over the long term.

  • WillyP

    sinz,
    “If you look at how much gold it takes to buy a consumer item like a man’s suit, you’ll find that it takes no more gold to buy it today than it did 100 years ago.”

    100 years?!?! Works going back to Roman times, too! A professor of mine pointed that out to me once.

  • easton

    Great article Eli. Of course Gold’s only worth is in the arbitrary value people place upon it. “ooh, look, a shiny rock, pretty rock.” I remember an old Twilight zone episode where a group of gold thieves go into stasis to run out the statute of limitations to awaken into a distant, future world, they do so, promptly kill each other in gold lust greed with one straggling out in the desert arms full of gold bars, he was later found dead along the side of the road and people were puzzled why he was clutching so tightly something so useless as an arm full of gold.

    Beyond this parable, there are about 1 billion troy ounces unmined reserves. Even seawater contains astonishing quantities of gold, but the process of recovery is not economical, yet.

    I take one exception to the article though, Gold has many industrial uses, it has a relatively high electrical conductivity and extremely high resistance to corrosion which makes the metal critically important in microelectrical circuits. Minute quantities dissolved in glass or plastic sheets prevent the passage of infrared radiation and make an efficient heat shield. Because of its chemical stability, gold is in demand in corrosive atmospheres. It is also plated on surfaces exposed to corrosive fluids or vapors. Its lack of toxicity and its compatibility with living systems make it indispensable in dentistry (think of all those gold fillings out there) and medicine. Of course the ancients did not know this, nor, apparently do many modern people (ooh, a shiny rock)

    Beyond this, so many of the worlds unmined reserves exist in places like South Africa or China. Only a fool would rely on Zuma or the Chinese Communists to prop up the cost of gold. South Africa has 50% of the world’s known stock of un-mined gold. One revolution and the market could be flooded. And, of course, if they find a way to extract gold from seawater economically, say goodbye.

    But yeah, lets bury our head in the sand and imagine what was before will always be.

  • easton

    one last thing, throughout history there have been about 3.3 billion ounces of gold mined, the oceans contain conservatively about 25 billion ounces. As I said, the extraction process is not economical, and the parts per billion are pretty damn small but here is an interesting abstract:
    Abstract

    We introduce a nanostructured Mn2O3-based adsorbent and a low-cost method that is capable of extracting gold, in the form of metallic nano-to-micrometer-size particles, from down to sub-ppm-level aqueous solutions including seawaters with high yield, good selectivity and recyclability, and environmental benignity. The Mn2O3 adsorbent, prepared by low-temperature synthesis followed by acid treatments, exhibits a mass-fractal-like morphology of agglomerated nanometer-size crystallite grains covered with active protonated sites and a surface area of about 120 m2/g. For aqueous solutions containing not, vert, similar100 ppm gold, a yield of 70 mg of gold/g of adsorbent was achieved. A Langmuir-type adsorption isotherm was observed, showing a rapid uptake of gold. The method is well suited to gold recovery from very dilute solutions. For example, over 95% of the gold was recovered from seawater samples containing 0.1 and 1 ppm of added gold. A pilot study of seawater with 1 ppt added gold showed similar results. The protonation–suspension–filtration–washing process can be recycled without noticeable degradation in yield.

    But hey, what has always been will always be right? Yeesh.

  • WillyP

    “But hey, what has always been will always be right? Yeesh.”

    No, matter of fact, if – like in that Twilight Zone episode – gold becomes super abundant, it will lose its economic value. Yeesh.

  • drdredel

    100 years?!?! Works going back to Roman times, too! A professor of mine pointed that out to me once.

    Just because some bloke gave you head in an alley for 10 bucks, doesn’t make him a “professor”.

    So the metal that has served as humanity’s money for, oh, 25-30 centuries, only has value because “people pretend that it does.”

    While this is obviously true (you can’t brew it, or smoke it and it won’t power anything, like one’s sex toys), the obvious problem with the observation is that if gold works as currency simply because people pretend it has value, then how is the dollar any different? That’s the way currency works. Granted at one point people used pepper as a currency and it can be argued that no matter how its valued, it can always be used to make your caesar salad taste a bit better, but no currency is designed to have the dual purpose of both representing wealth AND being useful. That’s just not how it works. We all agree to pretend that these green papers are worth something and as long as everyone agrees to pretend, everything is fine.

  • paolotheseer

    It makes no difference whether there is any gold in fort knox or not.
    The world runs on credit.
    IOU’s.
    Trust.

    Good luck to the nutbars hoarding their gold coins in their basement.
    Yep, I know, Becks says its gonna keep going up in value. LOL.

    Nothing like being played for a sucker.

  • easton

    WillyP, you argue that Gold has always had value, is an absolute necessity, yada yada, going on about 25 30 centuries and Roman times, with the clear implication that it will remain so but now you concede it can lose its value in a heartbeat. So essentially, you have no argument beyond a little history lesson?

    Gold has a ton of usages and in the future will likely have far more, but I see nothing wrong with selling off a nice chunk now to pay down debt. In fact, it will benefit the world provided it is put to practical usages and not stored in bank vaults.

    Short term, yeah knock yourself buying Gold, long term I wouldn’t bet the farm on it.

  • WillyP

    $317 billion out of a what, $13 trillion debt?

    yes, that’ll make the difference. sounds like the amount welfare payments have increased in the past year.

    nobody on this site understands economics (well that’s not quite true. there are about 1 or 2).

    drendl,
    i mean what does one write in response to such brilliance…. how about: your mom

  • JimBob

    Eli Lehrer writes “Gold, after all, is basically an economic sucker bet”

    Lets see, I started buying gold in late winter 1999 through late summer of 2002. Average price paid around 295. I have 4 safety deposit boxes full of gold coins. I have a fortune in gold today. My safety valve if things really get bad. Rest assured Eli, I’m no sucker.

    That aside, should we sell the gold in Fort Knox? It should be returned to the American people. Taxpayers. FDR took it from them after all.

    http://jimbovard.com/blog/2006/12/06/the-great-gold-robbery/

    Then we should end legal tender laws and let gold and silver freely circulate in the economy. Basically ending the government monopoly in money. Let the market decide what people want to use as money!!

    Eli Lehrer I see you are a research fellow at the Independence Institute. So you’re not against free market money are you??

    A Free-Market Monetary System

    http://mises.org/daily/3204

  • CO Independent

    Eli should stick to topics outside economics and finance, about which he appears to know next to nothing.
    1. As long as we have a fiat currency there is no reason whatsoever to sell gold. We can just print the dollars we need. Look up the term “seigniorage” and get a clue.
    2. For over thirty centuries gold has existed as a store of value and as de-facto money. Three thousand years is a pretty good track record in my book.
    3. In the context of a modern fiat currency/debt based economy, gold is a hedge against the inevitable temptation of the political class to try to solve underlying economic problems by printing money.
    4. Gold was $35/ounce when Nixon pulled the US off the gold standard in 1971. It has increased in value 35-fold since 1971.
    5. It is difficult to do an apples-to-apples comparison of gold to equities because the particular stocks in the indexes change over time. I believe only 5 or 6 of the equities in the DJIA today were in the DJIA in 1971. Nevertheless, the DJIA hovered around 900 in 1971, so it is up about 11x in the same time period. In short, the return on hold a shiny useless metal is significantly higher than return for holding shares in ostensibly productive companies.
    6. The thesis for investing in gold today is as follows: the entire western world is awash in debt in a fiat currency environment at the personal level and at the public level. Accrued debts are not serviceable, and unfunded liabilities for pensions and social security programs orders of magnitude larger than accrued debts. There are only two solutions to this problem: default or devaluation. Either solution will be increase the price of gold. Default will be a single or a double. Devaluation will be an overnight home run, potentially many times over.
    7. The thesis against buying gold is that the various governments and central banks have everything under control and will be able to manage these debt loads smoothly. Good luck with that one.
    8. If you are going to buy gold, buy physical gold, not EFT shares. The paper gold market will collapse in a crisis. When you start to see significant divergence between the price of physical gold and the price of gold EFTs it is time to buy guns, ammo, whiskey, and rice and head for the hills.

    @ Easton: there are relatively few industrial applications that justify the expense of gold these days. Gold is valuable in electrical applications because it is both a good conductor and it is inert, or noble. As the expected useful life of electronics has decreased, the inclusion of gold has decreased correspondingly. There is only a trace amount of gold in a modern cell phone–maybe 50 cents worth. It is still used in electronics for aerospace and underwater applications.

  • CO Independent

    @JimBob:

    If you’ve got half a clue you’ll get your gold out of those safety deposit boxes. If things get bad, as you suggest, you’ll have a revenue agent accompanying you to your safety deposit boxes and you’ll be redeeming your gold to the US government at their declared price and in exchange for their paper money. Obama has always admired FDR.

  • WillyP

    “nobody on this site understands economics (well that’s not quite true. there are about 1 or 2).”

    And CO Independent is one of them!

    You all really should read that article linked by JimBob:
    http://mises.org/daily/3204

    It’s eye opening.

  • paolotheseer

    Be afraid.
    Be very afraid.
    They’re coming to get us!

    Gold is for the naive and the stoopid.
    Go into your basement and count it.

    LOL.

  • JimBob

    CO Independent. No one except my wife knows what I have in those boxes. Not the bankers or the government. Like millions of Americans I have safety deposit boxes.

  • Cato

    Sure, no need to audit…we’re from the government and we’re here to help. Besides, the government would never lie to the people would it? I love it when the liberals and neocons get their panties in a bunch on the subject of AUDITS of the Federal Reserve and now the gold supply.

    Why do afraid of an audit?

  • paolotheseer

    You guys are joking right?
    You’re not really buying goldcoins and keeping them in boxes in the basement, are you??

    Dont you understand that the world changed.
    Increased money in circulation, creates more wealth.
    Credit = lubricant that allows wealth creating transactions to take place.
    The more lubricant, the faster the machine goes.

    Yes, our fiat currency devalues, and meanwhile we all get RICHER.
    We all drive more cars, bigger TV’s, etc etc.

    That’s why, the wealthier you are, the bigger your borrowings.
    Whether you are an individual, a corporation, or a national government.
    The process is designed to get you to USE CREDIT TO GENERATE WEALTH.

    Sitting in your basement, counting your coins, is the stooopidest thing anybody could do.
    You have been duped into this be Becks and Co.
    Fear = buy = hoard.
    Guess what. They are getting commission on the sales.

    You have been taken for a sucker.

  • paolotheseer

    “once an invention enters the public domain, it gets used more widely and generates more wealth.”

    Money is an idea.
    It doesnt reside in gold coins.

    Guys, get with the program.
    You need to start THINKING.

    Just cos it was on Fox, doesnt mean it must be true.

  • WillyP

    paolo,
    So more money = more wealth, because the more that goes around the more is produced.

    Impeccable logic. Why don’t we just print $20 trillion/day? Boy, wouldn’t that be a “fast machine” !???!

    You’d be a great Fed Chairman. Bernanke probably won’t be reappointed. You should consider applying.

  • midcon

    I wondered how long this thread would run before it veered off into the twilight zone of government conspiracy. It wasn’t very long at all. I’m not sure whether to be amused or saddened. Sure glad we kept that movie studio where we filmed the moon landing. It will come in handy when we have do a show about the fake gold in Ft. Knox!

  • paolotheseer

    You’re almost getting it, but not quite.
    But it’s a start.

    Money has no value. Right? We all agre on that.
    It is only an IOU/Trust voucher which enables a transaction to take place.

    So we need to print enough IOU/trust vouchers to ensure that the transactions can take place.

    We currently have more capacity than demand, so obviously we have to print and distribute more IOU/trust vouchers.
    The more we print, the lower their nominal value.

    Debt, devaluation and inflation are inherent in the economic process …. we dont care about any of that. It’s a sign that the process is working.

    It MAKES US RICHER.

  • CO Independent

    @JimBob:

    >> CO Independent. No one except my wife knows what I have in those boxes. Not the bankers or the government. Like millions of Americans I have safety deposit boxes.

    By FDR’s 1933 executive order safety deposit boxes were sealed and could not be opened without the presence of an IRS agent. Any gold you in your safety deposit box was confiscated at the bank. It never left the building.

    They don’t need to know what you have in the safety deposit box. If it is in the bank they own it.

  • WillyP

    paolo,
    Right. I think you’re a certified kook if you believe that. Let me quote Mssr. Bastiat:

    “Yes, like all other barren dreams formed to promote universal felicity. The extreme facility of the means which you recommend is quite sufficient to expose its hollowness. Do you believe that if it were merely needful to print bank-notes in order to satisfy all our wants, our tastes, and desires, that mankind would have been contented to go on till now without having recourse to this plan? I agree with you that the discovery is tempting. It would immediately banish from the world, not only plunder, in its diversified and deplorable forms, but even labor itself, except in the National Printing Bureau. But we have yet to learn how greenbacks are to purchase houses, which no one would have built; corn, which no one would have raised; stuffs, which no one would have taken the trouble to weave.”

    http://bastiat.org/en/what_is_money.html

  • easton

    $317 billion out of a what, $13 trillion debt?
    Yes, freaking duh. What, you mean unless it were 1 trillion or more it would not be worth it? How little you understand of basic economics.
    Anyway, I am not saying all 317 billion, that would kill gold prices, no, more like 50 or 60 billion.
    I don’t see the harm, and I see the benefit. 50 billion less owed is better than owing 50 billion. Poor WillyP simply can’t grasp this. I paid off my wife’s car in total though it is but a small portion of the bill because it was good not to owe the money on it. Poor, poor WillyP can’t even grasp this most elemental of ideas.

  • paolotheseer

    Dont quote someone else.
    Start thinking for yourself.

    The mere act of printing money does not make us richer.
    Money has no value, right?

    The questionis whether it enables WEALTH TO BE GENERATED.
    Does it enable more ECONOMIC TRANSACTIONS TO TAKE PLACE.
    Money is the LUBRICANT. It’s not WEALTH.

    We can all sit in our basements, hoarding, counting our gold coins, and watching “the value of gold go up”.
    Supremely pointless.
    Unless you are earning commision on the sales. Smile …. Here comes a message from our valued sponsor …. Goldline!

  • Newsprism

    Sure, we should sell the gold off. But first, melt it down and mint gold coins with images of a gravestone reading, RIP USA.

  • WillyP

    paolo,
    I quoted somebody else because he addressed your fallacy 150 years ago, and they are the same principles now as then. I’m sorry you’re weird and have a fetish for counterfeiting. I would recommend not voting and you might feel better.

    As for the “lubricant,” see here:
    http://www.americantusk.com/engines-lubricant-thins-out.html

  • easton

    WillyP: nobody on this site understands economics (well that’s not quite true. there are about 1 or 2
    Yeah, and it sure as hell ain’t WillyP. So let me get this right, if you had some stock that was at a premium and could use that money to pay for one year of your childs college, you wouldn’t sell it unless you could pay all 4 years, your mortgage on your house, your electric bill, your car payments, etc.
    I am literally astounded at how tiny is your grasp of the most basic forms of economics. Um… WillyP have you ever heard of buy low, sell high? Gold is very high now, we have a lot of debt. You can use gold to get money to pay off some small portion of debt.

    I feel like I am trying to teach Homer Simpson economics.

  • easton

    paolotheseer, poor WillyP simply can’t grasp any of this. He reads some pretty words, struggles to grasp the meaning, and feels like he understands something. But basic common sense is beyond him.

    You know WillyP, on Yap they had Stone money, big impossible to move circular stones that were assigned value by the chiefs and everyone went along with it. And it worked. For countless generations it worked.

    You know nothing of history or economics. In fact, you don’t even seem to be having any argument whatsoever.
    Short term as I said, buy gold, fine, knock yourself out. The world could descend into a new dark ages.
    But being that South Africa has huge unmined reserves and that the regime that is running is is not the kind I would place any bets on, you would be a fool to assume that some Mugabe type nutjob taking over would be the end of your delusions of the permanent value of gold.
    And no one here can dispute this.

    Seriously, imagine if Mugabe were President of South Africa and not Zimbabwe, he would have flooded the market with gold.

    Gold might be a good bet, or it might be a suckers bet, but it is a bet dependent on the stability of South Africa.

  • paolotheseer

    Please don’t provide any more links to second-rate thinkers. Particularly not to 2nd-rate hack blogs.
    You gotta think for yourself.

  • WillyP

    easton,
    you’re genuinely contemptible and don’t require or merit any further of my attention.

    paolo,
    bastiat is a second rate thinker? would you like to read the same thing in the writings of copernicus, jefferson, condillac, hume, menger, mises, or hayek?

    “paolo” – that sounds like a catholic name. perhaps aquinas? is that first rate enough for you?

    i do think for myself. but that does not imply that i disagree with whatever has been said before in the past.

  • CO Independent

    >> Yeah, and it sure as hell ain’t WillyP. So let me get this right, if you had some stock that was at a premium and could use that money to pay for one year of your childs college, you wouldn’t sell it unless you could pay all 4 years, your mortgage on your house, your electric bill, your car payments, etc.
    >> I am literally astounded at how tiny is your grasp of the most basic forms of economics. Um… WillyP have you ever heard of buy low, sell high? Gold is very high now, we have a lot of debt. You can use gold to get money to pay off some small portion of debt.

    >> I feel like I am trying to teach Homer Simpson economics.

    Easton, you rarely write more than a few words with out betraying what a fool you are, and this post was no exception.

    “Gold is very high right now, and we have a lot of debt” so says Easton. Gold is high compared to what? To what you believe it should be? And did it ever enter your mind that perhaps the price of gold and the level of debt are correlated?? Gold is high in relation to its price level ten years ago, but gold is low in relation to the size of the fed’s balance sheet. If you believe that the Fed can successfully draw down its balance sheet and that the US government can successfully manage its quagmire of debt and unfunded obligations then gold probably looks overvalued to you. Good luck with that.

    Again, gold is a store of value, and if you possess physical gold it is independent of government interference. You can argue until you are blue in the face, but the empirical data demonstrates that gold has been one of the strongest investments since Nixon pulled the US off the gold standard in 1971, outperforming every other asset class of which I am aware.

    Paolo, you confuse money with credit. I don’t have time to school you today, but there is one word that refutes your position: Greece.

  • WillyP

    extremely interesting, the case of Yap stone money. I had never heard of it. I’ll have to read a bit more. It’s fascinating.

    Either way, imagine for a moment if someone invented a machine that created new Yap stone money at no cost. Imagine they flooded Yap with these “counterfeited” stones. What would happen to the value of the original stone money, assuming it was indecipherable from the counterfeit stone money?

    Surely it would dilute the purchasing power of the stone money; surely it would cause a transfer of wealth to the Yap stone money counterfeiters; surely it would still be inedible, provide no shelter, and not keep the villagers warm or protected.

    In other words, money is a medium of exchange, nothing more nothing less. When gold is used as a conductor, it is not money, technically. When cigarettes were used as currency in in POW camps, they acted as money. When the gold is seized and all that’s left is paper bank notes, they serve as money, too.

    But when the printing presses spin out of control and flood a people with worthless bills, it does not make them any richer. All it does is transfer wealth, dilute purchasing power, and cause the “business cycle.”

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