Saturday, June 14, 2008
A Most Wonderful Paper
I recently read "Fractional Reserve Banking as Economic Parasitism: A Scientific, Mathematical & Historical Expose, Critique, and Manifesto" by Vladimir Z. Nuri (VZN), written 15 March 2005, at www.econpapers.repec.org/paper/wpawuwpma/0203005.htm. I have said similar things since February 1980, when I concluded: gold is money and paper is not. VZN writes, "It may be something like a new 'F=ma' rule of the emerging econophysics field. Some implications of the equation are outlined, derived, and proved. The phenomena of counterfeiting, inflation and deflation are analyzed for interrelations". I recommend VZN's paper highly. At least I agree with virtually all of it, having used similar examples myself. On page 51 VZN writes, "One remarkable idea for a blip-system is one with a totally fixed number of blips", emphasis in original. I examined the implications of a totally fixed money stock system in 1980! Disagreeing with Uncle Miltie, we don't need to increase the money stock 3-5% a year to ensure prosperity. A fixed money stock will work fine.