De Soto’s explanation of the crisis and paper money
De Soto at the Zermatt 2010 Summit, Nicolás Michel presiding
I was lucky to listen to the detailed explanation made by Hernando de Soto about how the lack of transparency of some derivatives, with no one knowing what “real” property they represent led to the crisis and might lead to a bigger crisis or stagnation in the future. I told him that most of his insights can be applied to paper money. In additon, most Central Banks act with less transparency and less restrictions than private banks. I will try to study the topic further. One of my professors at Catholic U in Argentina used to say: “Printing money with no backing is lying knowing that you are lying, and stealing knowing that you are stealing.” Unless englightened authorities in a major economy take the lead to sound money, it seems that we will only get there through competition of currencies or denationalization, but the latter seems more utopian in our curret climate of opinion.
