Money supply
Sir: It's a very surprising thing how few people seem to understand the simple, basic principle which underlies all economics. I learnt it myself at the knees of Dr Hjalmar Horace Greeley Schacht, the only man who could and did make currencies go up and down at will. The mammoth German inflation of the post-first-war years was entirely engineered by him to avoid the payment of reparations. So, at the snap of his fingers, was the dramatic rescue of the ' rentenmark.'
It goes like this. Money is only the means of exchange for goods and services. If you make too much money to cover the goods and services, you have inflation. If you make too little you have deflation.
That)e all. Elementary, isn't it? If only everybody got the message we might avoid the astonishing spectacle of the Chancellor of the Exchequer pouring forth fresh money at one end in order to " reflate " and "get the economy moving again," while the Prime Minister at the other end is putting a squeeze on price; and wages.
Anthony Gibbs Spurford House, Peaslake, Surrey.
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