Page:Stabilizing the dollar, Fisher, 1920.djvu/37

Rh constant. But gold is worth about $20 an ounce merely because an ounce of gold is about twenty dollars. Gold is fixed only in terms of gold, not in terms of the other things it purchases. A cheapening of gold cannot express itself in a lower price of gold but only in a higher level of prices of other things.

12. The Instability of the Gold Standard as Compared with an Egg Standard and Others is as great, and greater than that of a carpet standard. (Figures 10, 11, and 12.)

13. Seeing Ourselves as Others See Us. When prices in gold countries were going down and those in silver countries were going up, the Londoner would say that Indian prices rise because silver is depreciating and the Hindu would say that English prices fall because gold is appreciating. Each sees the other's change but finds it hard to realize his own, just as we find it hard to realize that the earth revolves.

14. A Visit of Santa Claus is supposed to double the money in every pocket, till, and bank. The next day the average man has twice the money he needs to carry. He spends the surplus and this extra demand for goods raises prices. But since this surplus money is still in circulation, so it is spent again and again, raising prices until they double, when it ceases to be a surplus; for at these prices twice the pocket money, till money, and bank money used before are needed.

Something like this happens when gold miners bring gold to the mint. They can't carry the new gold in their pockets. They spend most of it and so bid up prices in the mining camp. Then the holders of this gold spend it outside of the camp where they can buy cheaper. This raises the prices outside. Thus the