Wealth is constituted only of money as per the document. Wealth is defined as the ability to have an abundance of many different types of goods at your convenience. It explains that the accumulation of capital results in an increase in wealth. The article puts into consideration whoever owns the property but assumes that everyone’s living standards will improve regardless of the property owner.
The document explains that the value of money is somehow related to the amount that is in circulation. The value of a good is determined by the number of sellers and buyers. The article assumes that a country’s gold inflow determines how rich the country is, and this only increases with an increase in trade, but this is not the real case.
For example, supplying Britain with less quantity of gold compared to other countries will make British goods cheaper. As a result, cheap prices would cause more inflow of gold from other countries. However, for money to be created, there has to be a debt. The idea is founded on the fact that debt is the basis of the moneymaking process.
In general, the opposition to the interest rate regulation is opposition to price regulation. It states that England would be better off without the interest rates being set in the beginning. In this case, money is seen as a “pledge” to acquire goods and as a “counter” to determine value.
The currency stock is always on the rise, and thus for a country to have a balance of trade, it should be in a position to accumulate a large stock of its own. According to the article, there is an estimated cash requirement for each economic group that is determined by the length of the payment period.
Regulating interest rates will obstruct trade and make it difficult to lend and borrow. Interest rates regulation will also make life difficult for the less privileged in the society since they will get no profit that is allowed by the interest law. Regulating interest rates will also be an advantage to the bankers who lend money to clients at its par value. Money is an important commodity and is of necessity given that everyone must have it.
The regulation has increased the number of debts making borrowing a regular norm. From the article, it is apparent that no one borrows money without plans given that it is forced to by various circumstances. The situation will cause individuals to look for money and have it at whatever cost. As a result, many people would decide to bank their money. If this happens to be the case, it means that there will hardly be enough money in the country to ensure trade flourishes.
Politically, the document does not support the regulation of interest rates. It is opposed to the reduction of the maximum legal rate to four percent from six percent. These interests will not be productive since people will avoid the interests making the rates higher than before the regulation. The situation gives economists grounds to object the interest control strategy used today. Silver and gold are the most appropriate commodities used as currency in international trade.
These have equal value in all states, while the value of paper money is determined by the government involved and is only valid in that particular state. The result of the trade is riches and power. A nation’s wealth and living standard of its people is increased by the amount of trade of a country. Money makes it possible to acquire and accumulate property leading to prosperity and increased chances of conflicts. The effects also lead to political unrest in society.
Money’s natural interest is raised in two ways. First, it is raised by lending the inhabitant’s money in small portions. The strategy will lead to high interests given the scarcity of money. Secondly, it is raised when the money required for trade in a country is higher than what the country has when needed for operations. According to the article, more money will be needed, thus resulting in the price increment.
It is evident from the document that having mines in a country does not make a country rich. More often than not, the country always tends to be poorer compared to other countries without mines. Digging and manufacturing of these minerals call for labor that incorporates many people — being rich means having more gold and silver compared to other countries across the world. Countries that take such measures enable them to trade and enjoy commodities from other countries, which are paying for the services.
Silver and gold are an easier way to being rich if managed well. A country can become rich if they do not have the mines through commerce and conquest. In most cases, conquest appears to be outdated given that it was used by the Romans to produce wealth. Commerce is then the most common way as it fits everyone. For instance, England is one of the hardworking kingdoms and gained its riches through commerce.
Trade is of the essence of growing riches while money is needed to run the same trade. Reducing the interest rate to four percent will discourage lenders and will be a loss to the economy as this money runs trade. In general, money is brought in when importing less and exporting more commodities.