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The Monetary Economics of Thurston Howell III

Posted by michael on Tuesday August 31, 2004 @10:15AM from the she-sells-seashells dept.

DLWormwood writes "In what has to be the Strangest... Essay... Ever... The libertarian Ludwig von Mises Institute website has posted an essay which goes way too in-depth over the topic of why the castaways of Gilligan's Island used Thurston Howell III's 'worthless paper' instead of gold or seashells."

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Mises Institute rails against fiat abuses by Ars-Fartsica · 2004-08-31 10:32 · Score: 5, Interesting

I am an avid reader of most of what comes out of the Mises institute, which is often listed at SafeHaven.com, a bearish commentary site.
Their point is that fiat currencies are subject to abuse as they are not secured to a physical entity which limits its growth.
Note that for for one hundred years prior to the existance of The Fed, the purchasing value of a dollar was virtually unchanged!
Post Fed, post gold standard, post secured currency, the value of the dollar's purchasing power has dropped 97%. With Greenspan's current uber-loose credit scheme and our fractioanl reserve (aka fractional safety) banking system, this has vastly increased the amount of money circulating even in the last decade, secured now mostly by residential real estate.