Ludwig von Mises

When individuals are exchanging present goods against future goods they do not take account in their valuations of Variations in the objective exchange-value of money. Lenders and borrowers are not in the habit of allowing for possible future fluctuations in the objective exchange-value of money.

When individuals are exchanging present goods against future goods they do not take account in their valuations of Variations in the objective exchange-value of money. Lenders and borrowers are not in the habit of allowing for possible future fluctuations in the objective exchange-value of money.

– Ludwig von Mises –

The Theory of Money and Credit

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Ludwig von Mises

Even if index numbers cannot fulfill the demands that theory has to make, they can still, in spite of their fundamental shortcomings and the inexactness of the methods by which they are actually determined, perform useful workaday services for the politician. If we have no other aim in view than the comparison of points of time that lie close to one another, then the errors that are involved in every method of calculating numbers may be so far ignored as to allow us to draw certain rough conclusions from them. Thus, for example, it becomes possible to a certain extent to span the temporal gap that lies, in a period of variation in the value of money, between movements of Stock Exchange rates and movements of the purchasing power that is expressed in the prices of commodities.

Ludwig von Mises

For the etatist, money is a creature of the State, and the esteem in which money is held is the economic expression of the respect or prestige enjoyed by the State. The more powerful and the richer the State, the better its money. Thus, during the War, it was asserted that ‘the monetary standard of the victors’ would ultimately be the best money. Yet victory and defeat on the battlefield can exercise only an indirect influence on the value of money.

Ludwig von Mises

When the value of money is increased, then those are enriched who at the time possess credit money or claims to credit money. Their enrichment must be paid for by debtors, among them the State (i.e., the tax-payers). Yet those who are enriched by the increase in the value of money are not the same as those who were injured by the depreciation of money in the course of the inflation; and those who must bear the cost of the policy of raising the value of money are not the same as those who benefited by its depreciation. To carry out a deflationary policy is not to do away with the consequences of inflation. You cannot make good an old breach of the law by committing a new one.

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