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Letter to: Rt Hon George Osborne. The House of Commons London
29th December, 2006
Sound Money
Dear Mr Osborne
The combined wisdom of Irwin Stelzer and yourself, published in
the
Telegraph, makes excellent and fascinating reading. Margaret Thatcher
believed in Frederick Hayek and used his wisdom to reduce Britain
to a
three-day week. That condemns Hayek utterly and completely. At the
height of
the Blitz, Hitler failed to create the havoc perpetrated by Thatcher.
You inadvertently condemn yourself, by stating that sound money
policy is
the oldest principle of all. You claim that stability and your sound
monetary policy go hand in hand. Do you realise that your so-called
sound
Monetary Policy is to abandon money altogether? And to use debt
as our
currency. See what Labour says. Labour accepts (from the Tory Party)
that
new money should be issued as credit by private banks.
That is what you are calling sound money!!
Raising taxes to fight inflation!! How on earth can you imagine
that, to be
a sane statement.
When you issue new money as credit, which must be laundered into
money,
before it can be used to pay the interest on the credit and you
fail see how
paying for new money with old money at the rate of £2 of old
for £1 of new,
is not inflationary, then you do not understand inflation!!
All this confusion comes across to the electorate as outright dither,
so
that when we are told by the Treasury, we now face 50 years of ever
rising
taxes, all we can say is, “we thought that would be the way,
even under
Cameron”. I honestly believe that you are our best hope, but
you will need
to be a great deal better, than that feeble best.
The fundamental error in the subject of economics, is the absence
of a
definition of the word money. Here is the correct definition and
notice that
it does not exist in Hayek or anywhere else. Money is an idea backed
by
confidence. It is an idea, a mental concept and we run slap-bang
into
trouble when we try to use a symbol of money as money. Confidence
in the
idea of money depends upon knowing that money truly stands proxy
for what is
being exchanged.
That depends upon knowing how to make an accurate calculation of
the value
of that which is being exchanged, and also knowing what determines
a viable
cost.
If you can take that on board and realise the money markets only
exist
because there is no definition of money. Hence it is all guesswork
and money
markets are gambling casinos, where those with insider knowledge
rob the
wealth created by others.
The Tories have a lot to learn. The socialists, the communists
and New
Labour do not wish to know.
Economics has one other major flaw. There is no place for ethics
in
economics, as extant in the world today. Without ethics economics
is a pure
liability, as you can see for yourself if you look.
Doctor Edward C Hamlyn MBChB
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