Part 10/17:
Thus, the total supply of gold or any commodity money doesn't need to grow to facilitate economic expansion. The market naturally adjusts through the laws of supply and demand, and price stability is inherently maintained when the money system is based on tangible commodities like gold.
The Natural Laws Governing Money
Two fundamental "natural laws" emerge from historical and economic analysis:
- Price Stability through Supply-Demand Balance: When money derives from commodities like gold or silver, and government interference is minimized, prices tend to stabilize naturally. This occurs because the supply of the monetary medium reflects human effort and physical resource constraints.