How to Maintain Zero Inflation and Zero Deflation in a Planetary Empire For a Century — 3 Simple Steps
For over a century, the British Empire thrived … (with the occasional economic hiccup) …
With no price inflation OR deflation.
The Bank of England had to print currency exchangeable with gold. It had to account for all people, all economic transactions, in all British colonies, in an empire around the planet. And it had to account for the growth in economic activity as well.
No internet. No computers.
How’d they do it?
They tracked how many people entered the Bank in London to exchange pounds sterling with gold.
#1 — Too many people giving up sterling for gold?
INFLATION. People were losing confidence in the value of sterling.
They stopped the printing press.
#2 — Too many people buying sterling with gold?
DEFLATION. Economic opportunities had created pent-up demand for sterling.
Turn the printing press back on.
#3 — When pressure was applied to print money for the government’s political purposes …
They said NO.
They knew … Once that bottle was opened, the genie was never going back in.
For over a century, this simple method kept prices stable, against gold, for an enormous, growing empire.
And disappointed legions of wannabe-bureaucrats.
(Spoiler alert: The bottle got opened a long time ago.)