[quote=FlyerInHi]Humans created money. So why should we not adjust money supply to market conditions?
You have to spend money into the economy before it’s there. There’s no organic naturally occurring state of money.[/quote]
Yes, money supply can be controlled, and I believe that it should be controlled to some extent (of course, there are others, like gold bugs, who would disagree with me). But the money supply should adjust to changes in population growth and productivity levels, generally speaking. It should not be adjusted just for the sake of increasing asset prices, as we’ve seen over the past few years.
And you can have productivity before money creation. For instance, a person can cut down some trees and build a boat without using money (see cultures that don’t have fiat money as an example). Money is only needed to easily facilitate a transaction between the boat builder and a boat buyer. Labor precedes capital (including money); it’s what gives capital its value.
