Photo by olieman.eth on Unsplash

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?

Simple.

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.)

--

--

--

Curiosity. Questions. Simplicity. Principles. Meaning. The Vital Few, not the Trivial Many. Be your own Chief Questions Officer.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Quarantine Reading: America’s Top Wine Geek — Thomas Jefferson vs Robert Parker

HILD 12: Individual Medium Post 1

Documental archives and the human emotions

The USPS: a love letter

The Weather Balloon Lie

Juneteenth: Emancipated but still not free

PEACE AND SECURITY (Part 1)

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
David Kimbell

David Kimbell

Curiosity. Questions. Simplicity. Principles. Meaning. The Vital Few, not the Trivial Many. Be your own Chief Questions Officer.

More from Medium

Goodbye decade of Digital Financial Re-evolution.

Worldly Wisdom for 2022

How reading family history will recharge your battery and TOTALLY change what you’re about to write…

What does Web 3.0 really change?