Paper Money Collapse: The Folly of Elastic Money, 2nd Edition

Chapter 8The Beneficiaries of the Paper Money System

A system of elastic money is suboptimal, unstable, and ultimately unsustainable. Nevertheless, it has its defenders, apologists, and enthusiastic advocates. It is unlikely to disappear quietly. The measures by which the state will try to uphold it will most certainly become more aggressively interventionist and even draconian as the inconsistencies and instabilities become more apparent and pervasive. Since the recent crisis, interventionism has already had a renaissance globally, and this has been largely welcome by the wider public. Most people still believe that too much capitalism is the cause of crises rather than the ongoing monetary interventions and institutionalized market manipulations that characterize our fiat money system. The end of this system is ultimately as certain a prospect as anything in economic forecasting can ever be, for the simple reason that political will cannot lastingly sustain what is economically unsustainable, but it promises to be a messy affair and thus unpredictable in its precise unfolding.

But still, it seems appropriate to make some kind of forecast in this book. I try to do so in the final chapter. This and the following chapter first deal with the two forces of opposition to a transition to a market-based monetary system of apolitical money: the direct beneficiaries of the present system and the widely shared system of beliefs about economics and the role of the state in the economy ...