Gresham's Law and Fiat Currencies

Thu, 11 Jun 2026 00:00:00 +0000

Gresham’s Law stipulates thus. “Artificially overvalued money will drive out of circulation artificially undervalued money.”

As terrible as the US Dollar has been at inflation in a century, other currencies have proven to be worse. Governments throughout the world have been egregiously inflationary. They have expanded their money supply and devalued their currencies. Entities in these countries have thus resorted to hoarding (a term without a negative connotation to me) US Dollars. The upward pressure on the demand for US Dollars is such that despite the massive expansion in US Dollar supply, we do not see the corresponding amount of price level rises in the US. The abysmal fiscal policies of the rest of the world allows the US to export its price inflation.

Financial-Repression on blog.nath.page

Gresham's Law and Fiat Currencies