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Enough with the Praise for Stanley Fischer and Israel’s Central Bank

There should be no central bank which regulates the supply of money.

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Stanley Fischer

Stanley Fischer
Photo Credit: Yori Yanover, based on image by Miriam Alster/Flash90



In a free market for money, the best, most efficient, and most honest money coiners will get the most business and have the most coins circulating on the market. Those coining companies that cheat and lie about the purity of their coins will lose business and go bankrupt. Their coins will not circulate, or they will circulate at a discount.

In a free market for money, the best, most efficient, and most honest money receipt issuers (currency printers, private banks) will store the most money and issue the most currency. Those private banks that cheat and lie about how much silver or gold they have in their vaults to match the receipts and “inflate” their currency will lose business, inspire their receipt holders to call in their receipts for silver and if they can’t provide it, they will go bankrupt. Their currency will not circulate, or it will circulate at a discount..

In a free market for money, you will have several different competing currencies and coinages, with people accepting the ones with the best reputations and rejecting the ones that are unreliable.

Interest rates and prices will remain stable as money supply and money demand equilibriate, and as in any developed economy, goods and services will increase faster than the supply of money, allowing for a gently falling price level and everyone to get richer in real terms.

Or you can have someone like Stan the Shekel Man Fischer in charge, printing sheets of paper backed by absolutely nothing, causing prices to continually rise and government controlled money to continually lose value, making everyone poorer and more miserable.

Stanley Fischer did not save the Israeli economy from collapse. He simply did not abuse the insane power given to him as badly as other central bankers did: the monopoly power to print money. This power, incidentally, was given to him in much the same way as our fictional Stan Shoemaker’s was given to him: By a bully state ready and willing to arrest anyone besides Stan who manufactures shoes. Or in this case, money. And why would the Israeli government forbid anyone but Stan their goon from manufacturing money? Because when you have control over the entire money supply, you can spend it on anything…you…want. Like welfare. And leather seats for Knesset members. And armored cars for party heads. And first class trips to France for Defense Ministers. And subsidies to ignoramuses who you want to vote for you. And huge campaign posters and TV ads and God only knows what else.

When one man controls the shoe market, the quality of shoes goes down and everyone who wears shoes, suffers. When one man controls the money market, the quality of money goes down. It loses value. It makes you poorer.  Everyone who uses money, suffers.

Every single time a national/federal/central bank prints money with the flip of a switch, it steals from people like you and me who have to work to earn our money.

Visit Settlers of Samaria.

Rafi Farber

About the Author: Rafi Farber blogs at SettlersofSamaria.org.

The author's opinion does not necessarily reflect the opinion of The Jewish Press.

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