Steve Baker MP on sound money

Episode 68: GoldMoney’s Andy Duncan speaks to Steve Baker MP, a Conservative backbencher who represents the constituency of Wycombe in the United Kingdom’s House of Commons. A supporter of the Austrian School of economics, Mr Baker has launched several private member’s bills in parliament – with the support of his colleague Douglas Carswell MP – aimed at advancing dialogue on the subject of sound money. In this podcast Steve Baker discusses these bills, along with his views on quantitative easing, the post-Bretton Woods monetary order, and the chances of a future monetary reset. Mr Baker also touches upon the future of the euro, Britain’s membership of the European Union, and his co-founding of The Cobden Centre. He also discusses a possible future political initiative to launch a British gold pound project.

Download audio file: Steve Baker MP on sound money 
(18:01 min)

This podcast was recorded on 15 November 2012 and previously published at

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4 replies on “Steve Baker MP on sound money”
  1. Steve Baker seems to think that QE is significant and somehow it equals “money printing”. Numerous others labour under this illusion.

    The reality is that money (or to be accurate, the monetary base) is simply a government / central bank liability that yields no interest. In contrast UK government debt currently yields about 2% (which equates to about zero percent in real terms, i.e. after adjusting for inflation).

    As to Japan, 5 year Japanese government debt yields about 0.2%: i.e. next to nothing. Now can someone tell me what the big difference is between debt that yields nothing and debt that yields next to nothing? Because – silly me – I can’t see the difference.

    1. says: mrg

      In what sense is base money a liability / debt?

      It’s not as if it’s redeemable for anything.

  2. Hi Mrg,

    Good question. Base money is IN THEORY a debt: £20 notes actually say something like “I promise to pay the bearer £20….”. But that’s nonsense of course.

    A slightly better argument for calling base money a debt is that it can be used to cancel out a debt owed by citizens to government. I.e. if government demands £X in income tax from you, that’s a debt owed by you to government. And that debt can be cancelled out by using base money. (In fact it’s the ONLY sort of money government accepts in payment of taxes. That is, when you write a cheque to HMRC drawn on say Lloyds, government will demand base money from Lloyds in settlement.)

    But the real point here is that whatever the nature of base money, Gilts (i.e. government debt) are little different in nature, because government is under no obligation to give Gilt holders anything other than base money on maturity of those Gilts.

  3. says: Peter Mcgee

    Just watched the recent interview on Russia Today. I found it very honest and informative.
    At last an honest MP….well done Steve.

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