yup
I can quote Mises saying that bank notes are likely to disappear under free banking. Do you know where he says that ?
Btw, fiduciary media are by definition made out of thin air.
You actually begin this conversation like you knew something about FRB, but now you totally blew it.
Read the Theory of Money and Credit, and no fiat is made out of thin air not feduciary media. Yes, there is a difference.
Not in monetary economies… And even in barter economies there are goods which cannot be exchanged.
I’ve actually said that multiple times now, how incredibly unlike you to completely miss something.
Fiduciary media are uncovered money substitutes, meaning things which act like money but are not backed by the actual supply of money, thus artificially increasing the supply of money and underbidding the market rate relative to the natural rate (as well as increasing price levels). Fiduciary media, by definition, must be created out of thin air. What the hell are you talking about?
Nonsense, you just have to view money as a good. Yes, goods like personal attributes cannot be exchanged.
No, you are thinking of fiat, Mises even talks about the benefits of fiduciary media in the book.
Money is a good, but “goods” are not homogeneous. In fact, there are 3 categorizations of “goods,” consumption, production, and media of exchange, a good can move between these 3 categories freely, unless we’re talking about fiat money. This is something Mises spends a lot of time on in chapters 3,5,7, in The Theory of Money and Credit. Again, what the hell are you talking about? Are you sure you read the theory of money and credit?
Part of my notes from Chapter 5- MONEY AS AN ECONOMIC GOOD:
When a consumption or production good are lost or gained, the wealth of society correspondingly alters; this is not the case for money, creating money does not make society richer, and destroying it does not make it poorer. Changes in money supply only affect the various price indices. The laws which govern the value of money are different from those that govern the value of production goods and consumption goods. Production goods derive their value from that of their products. When production goods produce, society gets richer; not so for money, when money supply increases, society is not made richer. So Mises agrees with Knies, all goods are fit into one of three categories, production goods, consumption goods, and media of exchange (these products can move freely through these categorizations, these classifications stem from their utility rather from their physical attributes). So money is not a production good, and ultimately, not capital.
what do you think fiduciary media are? what do you think ‘fiduciary’ means? do you know how the word is derived?
Really? What chapter? I have the book right in front of me. You might wanna take a look at 526, it has a detailed breakdown of money in all forms, beginning with money in the broader sense. I hate these liars who come here and make shit up.
Read Human Action. I browsed TMC and is not especially well written - or maybe the translation is bad. I take it you don’t know about Mises’ criticism of fiduciary media as it appears in HA ? I’m also guessing you know nothing about previous critics of banking such as the currency school.
Unbacked ‘media’ are made out of thin air. Whether they are fiat money directly created by the state, or fraudulent bank notes created by PRIVILEGED banks, is really irrelevant.
But of course, you do have a big problem understanding counterfeiting both economically and morally considered - you showed as much in a different thread.
He hasn’t read TMC, he’s literally making shit up.
Fiduciary media is simply demandable bank claims that are not 100 percent backed by bank reserves, how much can be issued is restricted by economic factors. In contrast, fiat, isn’t subject to any natural limit. This is the position both Mises and Rothbard held. See appendix B of The Theory of Money and Credit, and MES.
Fiduciary media in fiat systems are not limited at all; the interest rate can be theoretically pushed down to zero, something we’re seeing right now.
so for a 90% backed fiduciary commodity money. 90% is backed by commodities, and the other 10% is backed by ‘thin air’ or did you understand coming from thin air to mean something else?
In a fiat system being the key.
Yeah, with a gold standard the creation of fiduciary media is limited by the industrial or consumption use of gold.
How about you take a look at
Part 3, chapter 1, pg 267
Part 3, chapter 3, pgs 298-299
Part 3, chapter 4, pg. 323
For starters…