Stockman (10) Price of Gold

David Stockman notes that in 1832, the dollar’s gold content was set at $20.67 per ounce and it was not altered for a century. There had been zero dollar deflation for a century, and the dollar’s gold value in international commerce had never varied except during war.

Why do we assume that inflation is normal.

Under a regime of sound money, it is not possible for public debt to appreciate for long stretches of time.

This truth is illustrated by the glorious reign of the 23 percent British console, a perpetual bond of the British government. First issued in 1757, it remained in circulation until 1888. Other than temporary wartime fluctuations, the price of the 3 percent console did not change for 131 years. Accordingly, no punter got rich riding the console on leverage, yet no saver lost his shirt by owning it for it yield. The console was a sound public bond denominated and payable in sound money.