The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice.
Interpretation
Gold's value comes from its scarcity and the difficulty of obtaining it, which prevents it from being artificially produced.
In this quote, Henry Hazlitt emphasizes that the worth of gold lies in its limited availability and the labor-intensive process required to extract and refine it. Unlike currency that can be easily printed or manipulated by governments, gold's intrinsic value is derived from its scarcity and the natural limitations of its supply, which contributes to its status as a stable form of wealth.
In practice
In a financial seminar discussing the importance of investing in precious metals.
A man with a scant vocabulary will almost certainly be a weak thinker. The richer and more copious one's vocabulary and the greater one's awareness of fine distinctions and subtle nuances of meaning, the more fertile and precise is likely to be one's thinking. Knowledge of things and knowledge of the words for them grow together. If you do not know the words, you can hardly know the thing.
Mere inflation-that is, the mere issuance of more money, with the consequence of higher wages and prices-may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.
Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests.
The only way we could remember would be by constant re-reading, for knowledge unused tends to drop out of mind. Knowledge used does not need to be remembered; practice forms habits and habits make memory unnecessary. The rule is nothing; the application is everything.
If a government resorts to inflation, that is, creates money in order to cover its budget deficits or expands credit in order to stimulate business, then no power on earth, no gimmick, device, trick or even indexation can prevent its economic consequences.
Economics is haunted by more fallacies than any other study known to man
What Asia's postwar economic miracle demonstrates is that_x000D_ capitalism is a path toward economic development that is potentially_x000D_ available to all countries. No underdeveloped country in the_x000D_ Third World is disadvantaged simply because it began the growth_x000D_ process later than Europe, nor are the established industrial powers_x000D_ capable of blocking the development of a latecomer, provided_x000D_ that country plays by the rules of economic liberalism.
The Federal Budget can and should be made an instrument of prosperity and stability, not a deterrent to recovery.
The first step to prescribing the right medicine is to recognize the cause of the illness. And, when it comes to what is ailing the global economy, extreme monetary easing has been more cause than cure. The sooner we recognize that, the stronger and more sustainable the global economic recovery will be.
It is an extreme perversion of capitalism if you can trade in something before you have even paid for it.
If bankers become overly conservative in response to past lending mistakes - or if examiners force such behavior - it will hurt bankers' own long-term interests and the economy in general.
Policy makers should be compelled to take action given the serious costs of long-term unemployment when overall unemployment is already high. A week of unemployment is worse when it is experienced as part of a longer spell.
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