On The Matter Of Money In Circulation, Economists Are Profound Excess

BusinessPolicyOn The Matter Of Money In Circulation, Economists Are Profound ExcessByJohn Tamny,Contributor.Follow AuthorJun 07, 2026, 10:00am EDTcirca 1969: Still-life of bundles of American paper currency. The bundles include five, ten, twenty, and fifty dollar bills. (Photo by Lambert/Getty Images)Getty Images“You can keep that crap for yourself.” That’s how a beggar in 1920s Germany reacted after a passerby handed him several 100-mark notes. The beggar’s response a little over 100 years ago makes evident two truths that still elude economists. For one, there’s nothing “stealth” about inflation. Since we all pursue not money, but what money can be exchanged for, we know intimately when currencies are being devalued.The obvious corollary to the above is that opposite the popular belief among economists, central banks can’t “gun” so-called “money supply,” or increase “the money stock." Production is the only source of increases in exchange media, and central banks produce nothing. For evidence of the folly of governments trying to plan money, or expand money in circulation, see Weimar Germany once again. No doubt governments can print money with abandon, but as the beggar’s response reminds us, doing so hardly increases usage and circulation of the printed media. Quite the opposite. See yet again the disgusted response from the Munich beggar to 100-mark notes: intimately aware that they would exchange for nothing, he tossed the worthless paper back. Non-begging Germans were no different, and they rapidly switched to other currencies. Markets, as opposed to central planners, at work. In concert with the mark’s descent into nothingness, “dollar booths” proliferated in Germany. With devaluation having rendered the mark less than worthless, Germans began circulating dollars among other currencies. Which was and is a statement of the obvious. MORE FOR YOUFar away from economic theory is the simple truth that production buys production. Money is but the accepted mea...