Tesla’s Bitcoin Purchase Is the Start of a Bullish Monetary Future – By John Tamny (Real Clear Politics) / Feb 10 2021
Not long before he passed, John Maynard Keynes referred to his disciples as “fools.” With good reason. Their attempted articulation of the ideas of their hero only served to embarrass him. It’s true to this day. Imagine believing that economic growth is as simple as stimulating the depressed by depressing the stimulated through forced wealth redistribution.
Still, this opinion piece is not about wealth redistribution. Or at least it’s not about wealth redistribution as it’s traditionally understood. It’s about currencies, about which Keynes was expert. Quite unlike the fools who pay no mind to the horrors of currency volatility, Keynes paid it a great deal of attention.
As he explained it in his Monetary Tract, economies “cannot work properly if the money, which they assume a stable measuring-rod, is undependable.” An “economy” is just a collection of people who earn what money can be exchanged for. Which is why instability of money as a measure of value is so devastating.
Keynes understood that instability of the units (meaning dollars, pounds, yen, etc.) harms the individuals who comprise any economy since those individuals are the ones who sometimes discover the hard way “that it is the holders of notes who suffer taxation.” Translated, governments tax us in two ways: either through extraction of wealth via direct taxation, or by laying off their debts to us in the form of currency devaluation that shrinks the exchangeable value of the monetary units that we receive in return for our work.
