Chapter 2: Primitive Moneys

• The details may differ, but the underlying dynamic of a drop in stock-to-flow ratio has been the same for every form of money that has lost its monetary role
• These historical facts are still apparent in the English language, as the word pecuniary is derived from pecus, the Latin word for cattle, while the word salary is derived from sal, the Latin word for salt.

Chapter 3: Monetary Metals

• Its tragic flaw, however, was that by centralizing the gold in the vaults of banks, and later central banks, it made it possible for banks and governments to increase the supply of money beyond the quantity of gold they held, devaluing the money and transferring part of its value from the money's legitimate holders to the governments and banks.
• This all means that the existing stockpile of gold held by people around the world is the product of thousands of years of gold production, and is orders of magnitude larger than new annual production. Over the past seven decades with relatively reliable statistics, this growth rate has always been around 1.5%, never exceeding 2%.
• The price of silver eventually crashed and the Hunt brothers lost over $ 1 billion, probably the highest price ever paid for learning the importance of the stock-to-flow ratio, and why not all that glitters is gold.

<aside> ♻️ Human civilization flourished in times and places where sound money was widely adopted, while unsound money all too frequently coincided with civilizational decline and societal collapse.

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• With money so unreliable and debased, speculation in commodities became far more attractive than producing them.
• Britain was the first to adopt a modern gold standard in 1717, under the direction of physicist Isaac Newton, who was the warden of the Royal Mint, and the gold standard would play a great role in Britain advancing its trade across its empire worldwide.

<aside> 🔒 History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours.

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Chapter 4: Government Money

• No pure fiat currency exists in circulation without any form of backing.
• The U.S. Fed's inflationary policy ended by the end of 1928, at which point the U.S. economy was ripe for the inevitable collapse that follows from the suspension of inflationism.
• Saving reduces spending and because spending is all that matters, government must do all it can to deter its citizens from saving.
• The notion that government management of the economy is necessary became the unquestioned starting point of all modern economic education, as can be gleaned from looking at any modern economics textbook, where government plays the same role that God plays in religious scriptures: an omnipresent, omniscient, omnipotent force that merely needs to identify problems to satisfactorily address them.
• Today, each ounce of gold for which foreign central banks received $ 35 is worth in excess of $ 1,200.
• In effect, the United States had defaulted on its commitment to redeem its dollars in gold.

<aside> ⚙ The total U.S. M2 measure of the money supply in 1971 was around $ 600 billion, while today it is in excess of $ 12 trillion, growing at an average annual rate of 6.7%.

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Chapter 5: Money and Time Preference