BW/002 'Real and Virtual Money: How to Prevent Financial Meltdown'
A propositional foundation is offered for macroeconomics in terms of 'real' and 'virtual' money, and 'well' and 'badly' behaved economies, all of which are defined. The unique characteristics of commodity money, and specifically gold, render it incomparably proof against both inflation and meltdown. The worldwide failure of the Phillips curve in the early 1970s is explained as a direct result of the cancelled dollar gold standard in August 1971. This signalled an era of 'bad' behaviour, which was compounded in the UK when the cash ratio method of credit control was terminated one month later, causing unprecedented inflation. Two 'Resolutions' are offered for recovering 'good' behaviour.
The two 'Resolutions', if adopted, would have prevented the global economic crisis which became apparent in 2008-9.