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>> No.55764829 [View]
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55764829

>>55764807
However, exchange rates between fiat would be ratios of the purchasing powers. This would show inflation, and the depreciation of a currency's purchasing power. So it was clear, that the freely fluctuating pricing of currencies was not possible. Gold was nationalized (became "the governments' money"), and foreign aid and trade treaties were used to manipulate those ratios. Due to Gresham's Law, that resulted in deficits, money shortages, and even black market rates in cases.

From this, the process is clear. However, many people nowadays refuse free markets when applied to money. The explanation Rothbard offers is one to note
>Nothing is “planned,” everything is haphazard. Government dictation, on the other hand, seems simple and orderly; decrees are handed down and they are obeyed.
>If government dictates over money, it has already captured a vital command post for control over the economy, and has secured a stepping-stone for full socialism.

Thank you for sticking with me, and we'll see you (hopefully without 4chan dying) next week, where we'll be discussing the application of the process to the West.

So some notes,
Gresham's Law can be also be applied to Bitcoin. But, not in the way you would think. A CEX is forced to accept any clean BTC the same way, but not tainted one. However, not all clean BTC is worth the same. Virgin or clean BTC is worth more, but they are accepted at the same rate. The result is the creation of secondary markets for "cleaner than ordinary BTC" and such coins (artificially undervalued) are pushed out of the circulation.
Secondly, Rothbard couldn't have dream of this, but it is worth noting that reserve requirements are no longer a thing. They are officially 0. They were replaced by "liquidity ratios". Also with the increasing push to use credit/debit cards (and likely CBDCs in the near future), the secondary limit on bank inflation is stretched even thinner, when citizens are nearly legally obliged not to withdraw.

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