Keynes on the Menace of Printing Money

How the celebrated economist might have structured his investment portfolio today “I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.” – John Maynard Keynes, 1946 John Maynard Keynes made that admission to Henry Clay, a member of the Bank of England's Advisory Committee, in 1946. Ten days later he passed away. Keynes had come full circle – from economic interventionist extraordinaire to proponent of Adam Smith's laissez faire. Twenty-five years after that, Richard Nixon would suspend dollar convertibility, scrap the Bretton Woods fixed exchange rate regime system of which Keynes was the principal architect and allow currencies and gold to float freely in international markets. The fiat money system of the late 20th and early 21st centuries was born. Though a radically different system from the one Keynes created in the aftermath of World War II, Richard Nixon declared upon its launch that "we are all Keynsians now."

First published here: Keynes on the Menace of Printing Money