OK, so this is the epitome of economic nerdiness, but admittedly I love it. John Maynard Keynes and F.A. Hayek come back to life to debate whether Keynesian or Austrian economics explain the economy, the only way they know how; rap-off:

Will the massive increase in money cause hyperinflation? I certainly think that high inflation will come when velocity picks up, however, YouTube user ramzpaul makes a good case that given the way our economy is set up, one thing we won’t have to worry about is hyperinflation. For the Austrians out there, it’s worth taking a listen to:

As the Daily Reckoning puts it, “EVERY fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse.” (4) There are two caveats to their argument, though: 1) if the fiat currency was ended for another reason, say the country was conquered and the currency replaced, then those examples are obviously ignored and 2) if the currency is still around today*, it also doesn’t count, because the currency will presumably fail in the future. The problem with this assessment is simple: What else can happen to a currency?

Statistics are often seen as infallible, though. Unfortunately, the truth is statistics are often very difficult to gather and compute in a methodologically sound way. Furthermore, there are a host of reasons a particular group may want to fudge these numbers. If anything, I hope this series will shine some light on how statistics can be flawed, and perhaps raise some healthy skepticism.

There are major advantages to 100% reserve banking. Right off the bat, banking panics are simply impossible. Since every bank has all its money on hand (or its customers aren’t contractually entitled to it at that time), there is no way that a run on the bank will cause a bank to go under. And therefore, large banking crises, such as the one we are seeing today, or saw in the Great Depression, or in the panics of 1819, 1837, 1857, 1871, 1893, 1907, etc. would never happen.

With a failed dollar we’d have far more church-going citizens eager to stockpile communion crackers. And for the altruistic of the local tribes, the communion crackers might end up back in the offering basket.

Credit, please stop masquerading as capital. Real capital comes from savings. A person or a government lives within their means, pays their expenses, burns through some money just for fun, and has some cash left over. The remaining sums are called savings. Savings then can be invested, stuffed in a mattress, or used as canvases to turn Andrew Jackson’s sideburns into a chin strap beard. Meet capital.