As Guido Hulsmann has pointed out, Rothbard (and Mises) both overlooked the effects of fluctuations in the demand for natural commodity money on the pure rate of interest… it turns out that there is, in fact, an effect.
Clayton -
What an evasion. So what if they want more money than what is supplied?
Is this question in regards to the 1ounce of gold supply?
The conclusion that any quantity of the money supply is just fine, is true from a technical perspective based on the theory of money.
If the market for whatever reason preferred a more abundant metal, they would gradually increase demand for it and gradually transition to a different commodity long before the supply is reduced down to 1 ounce.
Not even close. People are welcome to try and get all of the lending they want, but something tells me that when interest rates are at 30% people’s values will start to structurally change. Supply and Demand as well as the Marginal Theory of value works with money and lending just as it does with anything else. As the money stock is diminished interest rates will climb. This concept would apply equally if “society” all wanted corvette’s. Does everyone want a corvette? Sure, are they all going to get one?
To make the following statement: “What if everyone wants ???” This argument is very superficial and heavily flawed, especially from an Austrian perspective.
There was no evasion at all. I just assumed you were aware of these concepts.
Is any supply of Corvettes optimal?