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Fallen Into Money: Of the four secular miniatures, only Monaco has fallen into money. By an odd chain of chances, the Rock of Monaco, with a few adjoining acres along the coast, became, and has remained, except for a short interval, an independent principality. Through one of these odd chances, the Blanc Brothers, driven out of Homburg, set up their roulette tables here in 1861 and soon made the place extremely rich. But that was not to be by any means the last stroke of fortune. In 1953, the fabulous Greek shipping Croesus with the fabulous name Aristotle Socrates Onassis bought Monte Carlo outright and set about spending some of his surplus millions on its development.
The luck of Monaco has rarely been equaled by that of any bit of earth its size. Only the hundred fortunate acres of Vatican City—and what different acres!—can surpass it in conspicuous importance and i wealth as an independent state. I have long been interested in the pocket states of Europe and have visited all of them—Andorra, Liechtestein, San Marino and the two named above. Of the four secular miniatures, only Monaco has fallen into money. By an odd chain of chances, the Rock of Monaco, with a few adjoining acres along the coast, became, and has remained, except for a short interval, an independent principality.GRESHAM'S LAW, gresh'amz, in economics, is usually stated as "bad money drives out good." The law stems from the fact that money has a value both as money and as a commodity in the open market. The former value is set arbitrarily by law and is relatively fixed; the latter is determined by supply and demand and varies from time to time, "Good money" has a higher value as a commodity than as money and will disappear from circulation.
Money Supply and Investment. Monetary and fiscal policy is not held primarily responsible by most observers for this continuing inflation. Between 1950 and 1970, commercial bank deposits, for example, rose by less than 60%—a good deal less than prices. The ratio of net bank deposits to gross domestic product, which had been around 50% before World War II and as high as 65% in 1947, had fallen to around 30% in the late 1960's. Furthermore, currency supply rose less than incomes and can be shown to have followed, not led, their rise. |
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