Copyright © 2004 by Antal E.

Fekete January 1, 2004

GOLD STANDARD UNIVERSITY

Winter Semester, 2004

Monetary Economics 102: Gold and Interest

Lecture 4

THE PRINCIPLE OF
CAPITALIZATION OF INCOMES

¶ Optimizing provision for deferred consumption ¶ Teleology versus

causality ¶ No usury is involved in the exchange of income and wealth ¶
The triple contract ¶ Turning the stone into bread and water into wine? ¶
Inflationary and deflationary spirals ¶ Double entry book- keeping ¶
Oriental hoarding — Occidental dishoarding ¶ Interest and the
Reformation

Optimizing Provision for Deferred Consumption

We have seen that whenever provision for deferred consumption is made, it is done
through converting income into wealth as the initial step, later to be followed by the
conversion of wealth back into income as the concluding step. The question of optimizing
the conversion arises naturally. In the last Lecture we discussed how the selection of the
most hoardable good provides an answer to the problem of optimization on condition that
we are confined to direct conversion, that is, hoarding and dishoarding. However, further
optimization will be possible as soon as indirect conversion becomes available to
augment direct conversion. Recall that indirect conversion means the exchange of income
and wealth. It appears when the prohibition on such exchanges has been removed,
making hoarding and dishoarding obsolete. Indirect conversion is the irreducible form of
credit that represents a leap in efficiency over direct conversion. The party giving up
present wealth in exchange for future income is the supplier of credit. Interest is seen as
the measure in the increase of efficiency of conversion due to the appearance of credit,
zero interest meaning direct conversion.

As history and logic suggests, income is primary and wealth is derived. This recognition
was codified by the American economist Frank Fetter as the Principle of Capitalizing
Incomes. It states that the value of wealth is due to the possibility of converting it into
income (deriving an income from it). Thus income is the source from which the value of
wealth flows. The capitalization of comparatively safe permanent incomes contains
within itself all the factors for the independent determination of the rate of interest.

Teleology versus Causality

The merit of the Principle of Capitalizing Incomes is that it puts the phenomenon of
interest into its proper context. Without it the mistaken belief may take hold that wealth is
primary and income is derived. Income is obtained by putting wealth out at interest. But
how is wealth obtained? This is a question that cannot be side-stepped, and it is not a
chicken-and-egg problem either. Wealth is obtained by capitalizing incomes.

The theory of interest holds a very special place in the history of human thought. Since
the time of Aristotle the practice of charging and paying interest on wealth put out in
loans has been stigmatized and, in many cases, criminalized. Even though the
Reformation put an end to the latter, much of the stigma has remained and continues to
be the source of anti-capitalistic agitation. Aristotle's mistake in ruling that taking and
paying interest is against natural law (pecunia pecuniam parare non potest) was that he
looked for the causes of interest — finding none. Instead, he should have looked for ends
that interest might serve — in which case he could have found the Principle of
Capitalizing Incomes. Here we have a most important means of wealth-creation: people
with little or no wealth can get it by capitalizing (part of) their income. Indeed, ever since
interest was decriminalized, the accumulation of productive capital has accelerated
beyond belief, along with the proliferation of inventions finding industrial (not to
mention therapeutical and recreational) applications.

Thus the Principle of Capitalization of Incomes exposes the teleological nature of

interest. The sources of interest cannot be determined on the grounds of causality. Nor
can interest be stamped out of existence by secular or canonical authorities as it is the
result of purposive action, being inextricably involved with the conversion of income into
wealth and wealth into income by economizing individuals, for whom it is indispensable
for survival. Proscriptions against interest may eliminate the exchange, but never the
conversion. The economizing individual may simply bypass the exchange and fall back
on atavistic forms of conversion: hoarding and dishoarding. However, society would pay
a high price for such wrong-headed policies. Wealth-creation would suffer a setback.
Industrious and frugal people would be prevented from accumulating capital. Efficiency
would be sacrificed, and society penalized for the sake of "ideological purity".

The right approach to understanding the phenomenon of interest recognizes its

teleological nature. It does not attempt to explain the nature and sources of interest on the
grounds of causality. As Carl Menger has emphatically pointed out, all voluntary
exchanges, such as that of goods for goods, or goods for services, are based on the mutual
advantage of the parties. The exchange of income and wealth is no exception. Here, too,
either party gets something it wants more in exchange for something it wants less. The
Principle of Capitalization of Incomes was originally stated by the American economist
Frank A. Fetter in his Principles of Economics.

There are two ways of looking at lending $1,000 for ten years at 5% annual interest,
although only one of the two, the loan, is normally recognized, in spite of the fact that the
other is the more revealing. Thus the man who borrowed $1,000 for ten years at 5%
annual interest has, at that price, sold an income of $50 per annum for a period of ten
years. At the end of that period he has the right and obligation to repurchase the same
income at the same price. It is clear that both the lender and the borrower are better off
with the exchange than without. Typically, the seller of the income is a younger man,
while the purchaser is older. The former is well able to generate the surplus income he
has sold through physical or mental exertion. With the proceeds of the sale he will buy
the necessary capital goods he needs in his enterprise to increase the efficiency of
production. The latter, the buyer of the income, could hardly put his wealth to a better use
than making a loan in order to augment his income. "He cannot take it with him", as the
saying goes. He is no longer able to augment his income through increasing his physical
or mental exertion. The reason for his accumulating wealth earlier was precisely the
recognition that time would come when his surplus of physical and mental energy would
give way to a deficit. These are his "harvest years", and the facility of exchanging wealth
for income is his tool of harvesting. The Principle of Capitalization of Incomes
recognizes the division of labor between successive generations. It is based on
cooperation that is perfectly voluntary, quite unlike the coercive "social security system"
sponsored by the government, whereby a shrinking number of younger workers are
coerced into supporting one older retiree, while the population of retirees is exploding.
These considerations were lost in the heated debates about usury and other aspects of the
nature and sources of interest, not to mention the debates about the merits and demerits of
governmentally enforced “old age security”. It is time to recognize that voluntary
division of labor has always been at the source of any act of exchange, including
exchanging income and wealth.
 No Usury Is Involved in the Exchange of Wealth and Income

Contrary to the bad press it has been receiving in this age of "scientific culture",
scholastic philosophy was way ahead of contemporary thought and, in many respects, it
is also ahead of ours. An outstanding example is scholastic thought on the subject of
interest and on the question of usury. The scholastic fathers were careful to distinguish
between usurious interest charged on personal loans and on 'dry exchanges' on the one
hand, and interest involved in the exchange of income and wealth on the other. They did
not consider the latter usurious. The issue came to a head at the Council of Constance in
1414 that upheld the position of the schoolmen that the purchase and sale of rent-charges
and annuity contracts involved no usury. Apparently, this decision did not satisfy the
more dogmatically inclined (not to say economically more backward) segments of the
Church. They raised the question again in Rome some ten years later. In 1425 Pope
Martin confirmed the earlier decision made by the Council, thereby conclusively ending
the debate.

Scholastic philosophy was on solid grounds with regard to its stand on the narrowing the
definition of usury to exclude interest on the exchange of income and wealth. According
to the Jesuit economist Istvan Muzslay, Thomas of Acquinas (1225-1274) determined
that a modest interest (in our terminology, discount) was justifiable on short-term
commercial credit as a risk-premium (damnum emergens), as well as compensation for
lost income (lucrum cessans). We shall return to this point in a future course on the bill of
exchange.

The Triple Contract

In Lecture 2 I have examined "rent charge" as an important historical example of the

exchange of income and wealth. A second example is the Triple Contract or contractus
trinus that was popular in the Middle Ages and in the Renaissance. As its name indicates,
it was a combination of three contracts in one as follows: (1) a partnership contract
between the 'lender' and 'borrower' sharing the profit or loss in the borrower's business,
(2) an insurance contract through which the borrower promised the lender compensation
for any possible loss in the business, and (3) another insurance contract through which
the borrower guaranteed the restitution of his share of the capital to the lender after a
stated number of years, regardless of the fortunes of the enterprise, provided that the
lender gave up his claim to the full share of profits. It can be readily seen that the triple
contract rationalized interest as an insurance premium. Economically, capital stock in the
enterprise has been legally converted into a bond paying interest to the owner of the bond
at a fixed rate.

This construction is most revealing. It exposes the point of contact between the marginal
productivity of capital and pure interest. It reveals that every investment is an exchange
of wealth for income. It also reveals the character of pure entrepreneurial profit as an
insurance premium that the entrepreneur must collect in order that his business may
survive the vicissitudes of an uncertain economy. Comparing the triple contract to triple-
entry accounting (mentioned in Lecture 2) we see that the lender is the capitalist and the
borrower is the entrepreneur. It does not matter whether a manager is hired, or whether
the entrepreneur acts as his own manager. The substance of the contract is the underlying
exchange of wealth and income. The triple contract was also considered as an admissible
use of credit that escaped proscription on grounds of the usury laws. The problem of
exchanging wealth and income, and its relevance to the problem of interest, has also been
treated by the British economist Philip Wicksteed.

Turning Stone into Bread and Water into Wine?

As discussed above, the point of departure in this study of the phenomenon of interest is
the recognition that an inexorable need exists, second only to the need for food and
shelter, urging the economizing individual to convert income into wealth in order that
later, when past his prime, he may convert his wealth back into income. For him, income
is an ultimate end, insofar as without it he may have no other ends in this “valley of
tears”. Since wealth is an indispensable means to that end in the twilight years of his life,
his need for conversion is beyond doubt. The theory of private property ought to take full
account of the fact that the conversion of income into wealth is the rational and
characteristically human manifestation of the law of the biosphere where all living things
can only survive by hoarding their substance in one form or another. In case of the
economizing individual this substance, as we have just seen, is the “most hoardable”
commodity, gold, which is in demand even as it is offered in the smallest practically
realizable quantities, and can be traded with the smallest possible exchange losses.

In passing we may touch upon a paradox that utilitarian philosophy has failed to solve.
An apparent contradiction exists between the needs of the individual and society. There is
a time in the life of every individual when he needs to draw on his savings accumulated
earlier. Yet dishoarding (no less than hoarding) is being looked at with disapprobation, as
an anti-social activity. It is unsettling as it allegedly affects supply unfavorably, possibly
at a time considered inopportune from the point of view of society. (By the same token,
hoarding allegedly affects demand unfavorably.) The utilitarian philosophers could not
clarify how the market provides for the conflicting demands of society and its ageing
members. Utilitarian philosophy has failed to solve the problem of hoarding and
dishoarding. In particular, it has failed to explode the arguments of Silvio Gesell, John
Maynard Keynes, and other inflationists, according to which the contractionist and
deflationary pressures inherent in a metallic monetary system can be the source of
poverty and chronic economic distress. In particular, the gold standard admits hoarding of
the monetary metal which, according to inflationist doctrine, is deflationary and the chief
cause of depression. At the same time these authors talk about the inflationist paradise,
where the miracle of “turning stone into bread and water into wine” would be routinely
performed by monetary technicians in the service of governments.

I refute the inflationist argument in the spirit of utilitarian philosophy, removing an

obstacle that had for a hundred years blocked the advancement of monetary science, as
follows. One must distinguish between two kinds of dishoarding. It is the dishoarding of
marketable goods other than gold that is deflationary. Dishoarding gold does, on the
contrary, ease the (real or imagined) shortage of purchasing media. To the extent gold is
hoarded occasionally, if is offset by occasional dishoarding. The gold standard is far from
being contractionist as asserted by the inflationists. Quite to the contrary: gold is the chief
prophylactic that protects the economy against deflation. When the banks or the
government sabotage the gold standard, they spawn a cycle known as the Kondratieff
long-wave cycle. The hoarding instincts of the people are channeled away from gold, a
natural conduit (as gold is not essential for human consumption), to other marketable
goods, an unnatural conduit and a dangerous agent when hoarded (as they could be
indispensable for human consumption). The cycle manifests itself through the
destabilization of the price structure as hoarding (dishoarding) marketable commodities
results in rising (falling) prices. The cycle of high and low prices gives rise to a
resonating cycle of high and low interest rates, as further analysis shows. The Kondratieff
long-wave cycle consists of inflation alternating with deflation. Resonance ultimately
causes a “runaway vibrator” effect that is capable of destructing the economy.

Inflationary and Deflationary Spirals

I define an inflationary spiral as the phenomenon of a rising price level causing people to
hoard marketable goods which, in turn, causes further price rises forcing a repetition of
the process. The definition of a deflationary spiral is analogous. It is a statistical fact, first
observed by the Soviet economist N.D. Kondratieff (1892-1930) that, for the past two
hundred years or so, inflationary and deflationary spirals have alternated, each lasting for
a period of 25-35 years. I shall discuss the Kondratieff long-wave cycle in greater details
later in these Lectures.

The most ominous consequence of the deliberate destruction of the gold standard is that
the Kondratieff long-wave cycle is getting out of hand, becoming a runaway vibrator and
threatening the world economy with a depression more devastating than any previously
experienced. When gold is banned, people will not refrain from hoarding. On the
contrary, their attention will forcibly be focused on the urgency of hoarding as they fully
expect prices to rise in the wake of the government and the banks defaulting on their gold
obligations. This triggers an inflationary spiral that must come to a violent end when
prices over-react and threaten the value of hoarded goods with an imminent collapse of
prices (in other words, the principle of declining marginal utility finally asserts itself). At
that point hoarding gives way to dishoarding, and a deflationary spiral is triggered. As
prices fall, more dishoarding occurs since owners of hoarded goods scramble to cut their
losses. Producers go bankrupt in droves, and unemployment soars.

Many a book has been written on the microeconomic damage that the destruction of the
gold standard by government sabotage has caused (such as damage to savings, capital
accumulation and maintenance). Yet authors have not given sufficient attention to the
macroeconomic damage for which the destruction of the gold standard is also
responsible, such as the deflationary spiral, bankruptcies, debt repudiation on a massive
scale, falling production, and growing unemployment. Paradoxically, the gold standard is
blamed for causing depressions when, in fact, the sabotaging of the gold standard is the
culprit.

At the present juncture the world economy is threatened by a treacherous deflationary

spiral that could end in the worst depression ever. It is not possible to understand this
development without realizing that the removal of the gold standard has destabilized the
interest rate structure and, hard on the heels of the Japanese, American interest rates are
inexorably plunging to zero. Falling interest rates decimate the balance sheet of the
producers, forcing many into bankruptcy. Later in these Lectures I shall give a more
detailed analysis of this hidden process in terms of failure in accounting practice. For the
time being I confine myself to reiterating that the disaster is a direct, although much
delayed, consequence of the deliberate destruction of the gold standard some thirty years
ago.

Double-entry book-keeping

The invention of double-entry book-keeping in Italy of the Trecento was a momentous

landmark in economic history. Göthe called it “one of the finest produced by the human
mind” in his Wilhelm Meister’s Apprenticeship. Double-entry book-keeping is of utmost
economic importance second only to the much earlier appearance of indirect exchange,
making direct exchange (better known as barter) obsolete. The new invention has made
indirect accumulation of capital via the instrument of contract possible, thus making
direct accumulation of capital via hoarding obsolete. Previously, there was only one way
for the economizing individual to convert income into wealth outside of family bonds:
hoarding (for much of the Orient, which was slower in developing the institutional
framework to protect contractual rights, it is still the only way). This immobilized large
amounts of gold, and made capital accumulation an arduous and protracted process, in
which reward was far removed from effort, dampening incentive.
The invention of double-entry book-keeping made possible a heretofore unprecedented
increase in the efficiency of gold as catalyst for capital accumulation. Gold’s physical
presence was no longer necessary in every conversion. From then on gold could work by
proxy as its role in the conversion has become residual. Thanks to the breakthrough,
partnerships could now be formed representing exchange of income (of the junior
partner) for wealth (of the senior). Later, with the gradual acceptance of “sleeping
partners” in the firm, the formation of a joint-stock company has become possible. Shares
in the joint-stock company could be traded as fixed-income securities (see the triple
contract above). Indeed, this they were in all but name, in order to avoid censure by
canonical and secular authorities under the usury laws. It is clear that without double-
entry book-keeping a departing partner could not be bought out, nor would balance-
sheets, income statements, and stock markets, have been possible. There would be no
precise and objective way of attaching value to the assets and liabilities of a firm, short of
liquidation.

Oriental hoarding — Occidental dishoarding

The new development released huge amounts of gold from private hoards as people
began to accumulate and carry wealth in the form of securities disguised as partnership
equity, instead of gold. By contrast in the Orient, where the social and institutional
arrangements were far more inimical to the individual and his freedom to choose, the
demand for gold and silver for hoarding purposes continued unabated. During the
Quattrocento gold disgorged by the Occident flowed to the Orient in payment for exotic
goods. Spices, silk, and satin enjoyed exceptional marketability in the Occident where all
great banking houses engaged in financing this lucrative trade. The world was treated to a
curious spectacle. The Occident was thriving while trading its gold with the Orient for
frankincense and myrrh — as it could use more of the latter, and it had learned to get by
with less of the former. It was this migration of gold from West to East that gave the edge
of industrial power to the Occident, an advantage it still has over the Orient.

This shows that gold is merely the whipping boy at the hand of the inflationists. Gold is
not scarce, though it quickly goes into hiding the moment the government and the banks
conspire to tamper with credit. There is no conflict between the welfare of society and
that of its ageing members. Very little if any gold is needed to complete all the exchanges
of income and wealth in the course of normal business, provided that the government
does not interfere with the free choices of individuals and the banks do not engage in
borrowing short to lend long. Only when such interference by the government and illicit
arbitrage by the banks take place does the demand for gold become sizeable. The correct
policy for the government is “hands off” — to let the market decide what is best for its
participants, and to blow the whistle when banks are caught red-handed indulging in
illicit interest arbitrage.
 Interest and the Reformation

The next advance came with the Reformation, during which canonical and secular
strictures on interest were eased, the definition of usury narrowed and, later, the
prohibition against both repealed. Whereas the partnership contract had originally been
designed with the concealment of interest in mind, now it became possible, for the first
time in history, to engage openly in the exchange of income and wealth with the rate of
interest freely quoted. The bond market was born as a result of these historic changes.
The right to income reserved by the bondholder could now enjoy the same legal
protection as the right to rent-charges (discussed in Lecture 2) enjoyed during the
prohibition era. Thus it remained for the Reformation to crown the great economic
advances of the Renaissance, and to free the exchange of income and wealth from its
former fetters. For the first time in history the rate of interest could manifest itself as a
market phenomenon.

References

Carl Menger, Principles of Economics, New York: N.Y.U Press, 1981 (originally
published in German in 1871 under the title Grundsatze der Volkswirtschaftlehre)

John Fullarton, On the Regulation of Currencies, New York: A. M. Kelley, 1969

(originally published in London, 1844)

Frank A. Fetter, The Principles of Economics, New York, 1905

Philip H. Wicksteed, The Common Sense of Political Economy, vol. I, London: Routlege
& Keagan Paul, 1933 (originally published in 1910)

A Message to the Friends of Gold Standard University

Last year I was, for personal reasons, forced to suspend publication of these Lectures in
the course Monetary Economics 102: Gold and Interest. I am happy to have a chance to
resume the series with Lecture 4. I shall do my best to avoid any further interruption. My
Lecture series will continue at the rate of one Lecture per month.

I welcome my audience, wishing everyone a Happy New Year. It may turn out to be year
of historical importance. 2004 may see the return of the discussion of the gold standard
from the “lunatic fringe”, where it has been exiled, to the center of academic interest.

Let me take this opportunity to remind you that I have developed my theory of interest in
the spirit of Carl Menger, the founder of the Austrian school of economics. Still, my
theory is flatly rejected not only by establishment economists but, curiously enough, by
latter-day Austrians as well. Their antipathy is presumably due to their belief that any
criticism of Ludwig von Mises, whom I also respect greatly, is sacrilege calling for
excommunication. My theory of interest rests on the thesis that the marginal utility of
gold is constant (while that of all other commodities is declining). This is the very
property that imparts to gold its quality of “moneyness”.

However, in the Gospel according to Mises we read that constant marginal utility implies
infinite demand which is contradictory (I agree); ergo gold cannot have constant marginal
utility (I disagree). Mises simply missed the interrelation between gold and interest. The
demand for gold is not infinite because interest acts as an obstruction to gold hoarding.
(For other goods, obstruction is provided by declining marginal utility). Coming to grips
with this fact is the key to the understanding of the predicament in which anti-gold
propaganda has landed the world. Tampering with interest ipso facto means tampering
with gold, and vice versa. The two cannot be separated, and it does not matter whether
the country is on the gold standard or not. If you ban gold, then people will start hoarding
other marketable commodities, which brings in its wake great economic dislocation such
as the destabilization of the interest-rate structure, the Kondratieff long-wave cycle, and
the runaway vibrator of extreme swings in prices and interest rates.

I would like to draw your attention to the discussion in my Lecture 4 (see section under
the caption “Inflationary and Deflationary Spirals”) of the so far unrecognized
macroeconomic damage that the deliberate destruction of the gold standard has caused, in
addition to the well-known microeconomic damage. The gold standard is blamed for
causing depressions when in reality it is the best prophylactic against economic
contractions. It was in fact the removal of the gold standard that has turned the
Kondratieff long-wave cycle into a runaway vibrator programmed to self-destruct.

I believe what we are discussing in this course is very timely: we may be witnessing the
turning of deflation into depression. The inflationary spiral that ended in 1980 was
characterized by the hoarding of marketable commodities such as crude oil (incredibly,
with the government of the United States as the greatest hoarder), grains, lumber, sugar,
to mention but a few. 1980 also marked the beginning of the deflationary spiral of the
Kondratieff long-wave cycle, characterized by dishoarding. It manifests itself as a
slowing of price increases and outright price declines as producers are losing their
pricing-power — the latter being so typical of the inflationary spiral. But the deflationary
spiral is not over yet, as the plunge of interest rates to zero is still continuing. If American
interest rates follow in the foot-steps of the Japanese, then we shall see the ugly face of
depression, complete with bankruptcies, defaults, and wide-spread unemployment.
Contrary to conventional wisdom, falling interest rates are not helpful to business: they
are lethal. A more detailed analysis of this hidden mechanism is one of the tasks of this
Lecture series, so please stay tuned. Another danger is that the Federal Reserve, in an
effort to check deflation, will run the printing press overtime. The paper mill churning out
unlimited amounts of new dollars may cause runaway inflation as foreign holders of
dollar-denominated assets are frightened into dumping their holdings. It is not possible to
predict whether the economy will succumb to depression or to runaway inflation.
Ultimately, the issue will be decided by the bond-speculators and their risk-tolerance of
carrying the burgeoning debt of the United States government in the face of the danger of
a collapsing dollar.

There is still time for the United States government to steer clear of these dangers and, at
the same time, to retain its monetary leadership in the world, provided that President
Bush opens the U.S. Mint to the free and unlimited coinage of gold.

It will not be easy to admit that the Federal Reserve has pursued the wrong monetary
policy for seventy consecutive years, cheered on by Big Government, Big Business, Big
Labor, and Big Academia. Politicians, businessmen, labor leaders, and economists must
swallow their pride, and accept history’s verdict that (whether they like it or not) gold is
an integral part of the world economy and cannot be shunted into irrelevance. Gold will
have a role to play in saving the nation and the world from a great disaster that is staring
us in the face.

Antal E. Fekete
Professor

Memorial University of Newfoundland

St.John's, NL, CANADA A1C5S7
e-mail: [email protected]

GOLD STANDARD UNIVERSITY

 SUMMER SEMESTER, 2002

Monetary Economics 101: The Real Bills Doctrine of Adam Smith

Lecture 1: Ayn Rand’s Hymn to Money

Lecture 2: Don’t Fix the Price of Gold!
Lecture 3: Credit Unions
Lecture 4: The Two Sources of Credit
Lecture 5: The Second Greatest Story Ever Told; (Chapters 1 - 3)
Lecture 6: The Invention of Discounting; (Chapters 4 - 6)
Lecture 7: The Mystery of the Discount Rate; (Chapters 7 - 8)
Lecture 8: Bills of the Goldsmith; (Chapter 9)
Lecture 9: Legal Tender. Small Bank Notes.
Lecture 10: The Revolt of Quality
Lecture 11: The Acceptance House; (Chapter 10-11)
Lecture 12: Borrowing Short to Lend Long; (Chapter 12)
Lecture 13: The Unadulterated Gold Standard

WINTER SEMESTER, 2003

Monetary Economics 102: Gold and Interest

Lecture 1: The Nature and Sources of Interest

Lecture 2: The Exchange of Income and Wealth
Lecture 3: The Janus-Face of Marketability

WINTER SEMESTER, 2004

Lecture 4: The Principle of Capitalization of Incomes

Lecture 5: The Pentagonal Model of Capital Markets
Lecture 6: The Hexagonal Model of Capital Markets
Lecture 7: The Bond Equation and the Rate of Interest
Lecture 8: Lessons of Bimetallism
Lecture 9: Speculation
Lecture 10: The Kondratieff Long-Wave Cycle
Lecture 11: The Ratchet and the Linkage
Lecture 12: Accounting under a Falling Interest-Rate Structure
Lecture 13: Aristotle on Check-Kiting

IN PREPARATION:

Monetary Economics 201: The Bill Market and the Formation of the Discount Rate

Monetary Economics 202: The Bond Market and the Formation of the Rate of
Interest