Money

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Monograph

Identifikator:: 1819853969

URN:: urn:nbn:de:zbw-retromon-207464

Document type:: Monograph

Author:: Cannan, Edwin http://d-nb.info/gnd/118666916

Title:: Money

Edition:: 6. ed.

Place of publication:: [London]

Publisher:: King

Year of publication:: 1929

Scope:: XII, 120 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part I. General principles

Collection:: Economics Books

VALUE OF GOLD 23 people think there is going to be a general rise of prices they think—without knowing it—that gold is going to fall in value, and act accordingly. Their joint judgment is more likely to be wrong than their joint judgment about iron or tin or houses because they do not take the particular circumstances affect- ing the commodity into consideration. This is per- haps the explanation of the fact that at one period for no definite discoverable reason people generally overestimate the prices of the future and therefore cause a boom in the prices of the present with the result of subsequent fall and depression. Whatever the cause of a boom, the high prices which mark it are synonymous with a low value of gold, which seems in strange contradiction with the ordinarv visw “at in a boom ‘every one wants money.” But th: contradiction disappears if we bethink ourselves what every one wants the money for: it is to buy commodities and services in hopes of making a profit because “ things are going up.” People may want money, but they only want it because they want commodities and services; the fact that commodities are supposed to be going up makes it desirable to lay money out on them at once : if the money is kept, it will not buy so much. The pressure is not to add to money stocks by selling, but to deplete the stocks of money by buying as far as can be done without too great inconvenience and risk. Individuals and banks will try their hardest to carry on with the smallest possible stocks of gold, when gold is the one important thing which they do not expect to rise in value. Thus, even if every one always paid in gold for everything immediate’ on receiving it, a preponder- ance of expeci-tinn oi higher general prices (lower value of golc) in the future would to some extent raise general pices (lower the value of go'™ in the

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