Peter Schiff responds to Mike Norman
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When you increase production without increasing the supply of gold, then the value of gold increases (in terms of purchasing power) if it the currency in play. That would be represented as deflation, nothing more or less. This kind of deflation should not affect productivity in itself, but it would have the effect of unfairly concentrating more wealth to people who have gold through a growth period. Ideally gold supply would expand evenly with production, so everything is kept at real values - no money games!. But that requires paper money systems with the policy of locking fiat money value to real production values. And that policy can be (and probably would be) too easily undermined by the corrupt.
ReplyDeleteMr Schiff really knows his stuff. He understand the relationship between money games and real wealth and production better than anyone I have ever heard. He is obviously a disciplined thinker who confronts natural contradicitons to expand, test and clarify his own understanding.