JackTheMimic on Nostr: In the case that a good costs $100 and 25% tariff the exporter gets $75 revenue and ...
In the case that a good costs $100 and 25% tariff the exporter gets $75 revenue and the importer gets the good and $25 in tax. That increases the money supply upon consumption where it otherwise wouldn't.
On a gold standard, the supply of money is pegged to the gold reserve. So an additional $25 per $100 import actually settles (quarterly or annually) in gold meaning the exporter has to make good their claim on the dollar notes. So in effect, the tarrif would break down to $50 in gold to the exporter for $100 worth of goods. While producing no new dollars interior to the US. (Which in the fiat standard was created when the dollars were sent to the exporting country as austerity)
On a gold standard, the supply of money is pegged to the gold reserve. So an additional $25 per $100 import actually settles (quarterly or annually) in gold meaning the exporter has to make good their claim on the dollar notes. So in effect, the tarrif would break down to $50 in gold to the exporter for $100 worth of goods. While producing no new dollars interior to the US. (Which in the fiat standard was created when the dollars were sent to the exporting country as austerity)