The invention of money
“How did these once wild ideas become part of the very fabric of modern finance and government? Trial and error. It was not the case that smart people figured everything out at once and implemented it simultaneously, as [John] Law tried to do. The modern economic system evolved, and evolution involves innovations, repetitions, failures, and dead ends. In finance, it involves busts and panics and crashes, because, as James Grant says in his lively new biography of the Victorian banker-journalist Walter Bagehot, ‘in finance and economics, we keep stepping on the same rakes.’”
USAGOLD note: “Stepping on the same rakes” seems to be a permanent aspect of the human condition – and, it follows, the economic functioning of governments and central banks. It is because “we” keep slipping on the same banana peel that gold and silver traditionally make a great deal of sense in the investment portfolio.
Re-post from 8-7-2019