sexta-feira, fevereiro 05, 2010

# 13

«[the banks] are in the habit of providing for the prompt redemption of the money-substitutes issued by them by holding a reserve itself consisting of money-substitutes; only so far as these covering money-substitutes are money-certificates do the issued money-substitutes not bear the character of fiduciary media. It is only fairly recently that the central banks-of-issue also have begun to adopt the practice of admitting money-substitutes and foreign bills into their conversion funds. Just as the goldsmiths once began to lend out part of the moneys entrusted to them for safe keeping, so the central banks have taken the step of investing their stock of metal partly in foreign bills and other foreign credits. An example was set by the Hamburg Giro Bank, which was accustomed to hold part of its reserve in bills on London; it was followed during the last quarter of the nineteenth century by a series of banks-of-issue. It was with regard to their profits that the banks accepted this system of cover. The investment of a part of the redemption fund in foreign bills and other foreign balances that could be easily and quickly realized was intended to reduce the costs of maintaining the reserve. In certain countries the central banks-of-issue acquired a portfolio of foreign bills because the domestic discount business was not sufficiently remunerative. Generally speaking, it was the central banks-of-issue and the governmental redemption funds of the smaller and financially weaker countries that tried to save expense in this way. Since the war, which has made the whole world poorer, their procedure has been widely imitated. It is clear that the policy of investing the whole redemption fund in foreign claims to gold cannot become universal. If all the countries ofthe world were to go over to the gold-exchange standard and hold their redemption funds not in gold but in foreign claims to gold, gold would no longer be required for monetary purposes at all. That part of its value which is founded upon its employment as money would entirely disappear. The maintenance of a goldexchange standard with the redemption fund invested in foreign bills undermines the whole gold-standard system.» (p. 337)
 
«An entrepreneur who wishes to acquire command over capital goods and labour in order to begin a process of production must first of all have money with which to purchase them. For a long time now it has not been usual to transfer capital goods by way of direct exchange. The capitalists advance money to the producers, who then use it for buying means of production and for paying wages. Those entrepreneurs who have not enough of their own capital at their disposal do not demand production goods, but money. The demand for capital takes on the form of a demand for money. But this must not deceive us as to the nature of the phenomenon. What is usually called ple~tifulness of money and scarcity of money is really plentifulness of capital and scarcity of capital. A real scarcity or plentifulness of money can never be directly perceptible in the community, i.e. it can never make itself felt except through its influence on the objective exchangevalue of money and the consequences of the variations so induced. For since the utility ofmoney depends exclusively upon its purchasing power, which must always be such that total demand and total supply coincide, .the community is always in enjoyment of the maximum satisfaction that the use of money can yield. (...) Every increase in the rate of discount gives rise to fresh complaints about the illiberality of the banks' methods or about the unreasonableness of the legislators who make the rules that limit their powers of granting credit. The augmentation of fiduciary media is recommended as a universal remedy all the ills of economic life» (p. 340-341)

Ludwig von Mises, The Theory of Money and Credit (1912)