There has been a great deal of discussion about stimulus as a cure for recession and incipient depression. Let’s now look ahead a bit.

When is it time to start worrying about inflation? Not according to Ben Bernanke or me, but according to John Maynard Keynes.

We can look at Keynes’s 1937 trio of articles for The Times of London, “How to Avoid a Slump.”

Apparently the time to start worrying is at the first signs of recovery, and not when the level of unemployment and output (or output growth) has returned to “normal.”

"Paper money eventually returns to its intrinsic value - zero."
(Voltaire, 1694-1778)

Paper Money in Asia

The first well-documented widespread use of paper money was in China during the Tang (618-907 A.D.) dynasty around 800 A.D.^[1] Paper money spread to the city of Tabriz, Persia in 1294 and to parts of India and Japan between 1319 to 1331. However, its use was very short-lived in these regions. In Persia, the merchants refused to recognize the new money, thus bringing trade to a standstill.