...the debate between full reserve banking Austrians and advocates of Real Bills such as Fekete can be considered "technical" in nature. Both strongly advocate a return to the gold standard in preference to the current monetary system, which both groups consider unsuistainable and destructive.
Well, current economic thinking, epitomized by J.M. Keynes, criticizes the gold standard for being the cause (and international transmission vector) of the 1930s depression. Fekete's rebuttal is that the Great Depression (and interest rate volatility generally) were a response to legislatures and central banks suppressing the market in Real Bills and taking gold coinage (into which bills mature) out of consumers' hands. He cites events of 1909 in France and Germany, obliging their civil servants to accept paper money in lieu of the gold coin of the realm, and says international trade sanctions after World War I finished destroying the international commercial paper markets.
Pointing out the difference between discount and interest
- Laika the Space Dog Wins the Future, or: President Sets a Price-Level Target in a Depression, FDR 1933 Edition
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