When Ron Paul has talked about monetary policy, he talks about competing currencies. Basically, letting the free market handle money.
Are you in favor of a gold standard (US paper dollars tied to an amount of gold) or competing currencies?
Competing currencies. A gold standard is just an other form of state monopoly.
Aren’t they basically the same thing since since historically a gold standard has always emerged from from competition among competing commodity monies?
Historically, a gold standard simply meant defining specific terms as meaning specific weights of gold. For example, the U.S. dollar was defined as 1/20th of an ounce of gold. This is why the “price” of an ounce of gold was $20 until 1933.
As a result, paper dollars were not money themselves. Rather, they represented money. In other words, a paper dollar signified that the issuer (typically a bank) was good for the equivalent amount of gold.
Even in the presence of a State, a gold standard per se in no way implies State control over the money supply. That being said, I’m personally in favor of competing commodity currencies.
This. However, competing currencies allows for other commodities to be used as money.
It depends on what you mean by “gold standard”. Competing currencies are not mutually exclusive to gold. It’s likely that all competing currencies will be “backed” by gold base money. The bank note is simply a money substitute.
There has been countries where monetary freedom has led to the use of silver and not gold as money. Philipines in the early XX century for example. Just saying.
I’m against the state issuing money. How do you stop competing currencies without violence? Why would you want to?
Although the state currently has a monopoly on currency used domestically, what about in the international sense? Internationally, is there not some form of competition over various currencies for trade between nations? In that sense, people have a choice to use the U.S. Dollar, E.U. Euro, or whatever other currency he/she wishes. It’s still a state-backed currency, but perhaps if the currency becomes more stable under a gold standard (if that would indeed “stabalize” it) versus a commodity-based currency - could that create a type of compromise between government involvement and marketplace competition?
I don’t know much on monetary policy, so please feel free to point out any erroneous assumptions I might have made.
Competition vs. monopoly? Of course competition, for a hundred different reasons. The gold standard is just a catchphrase. When it comes to monetary reform proposals Hayek is vastly superior to both Mises and Rothbard. Down with legal tender, and let business deal with the rest.
I am for a free market in money. If the market chooses gold, so be it. If it chooses gold and silver, or something different altogether, so be it. Individuals voluntarily making exchanges can figure out what they want to use as medium for exchange. The market can figure it out, it just has to be allowed to.
The Spanish silver dollar was used in the Philippines because the country was under Spanish colonial rule for over 3 centuries.
competitive currencies because you can use other commodities besides gold to back things up…
Currency competition could be introduced overnight. No changes to the existing monetary order would be required.
But don’t hold your breath. The elites would rather put up with a gold (well, some “commodity backed fiat money”) standard than currency competition, any day of the week.
I think we’re stuck in a monetary twilight zone right now because I believe there is a Titanic struggle going on behind the scenes. The elites have been planning for decades (centuries?) to implement a global fiat currency with a single, world central bank as an intermediary step to a world government (Hoppe). The problem is that, like any cartel, how do you ensure all members abide by the agreement? Short of a world-wide assassination squad with the ability to take out anyone at anytime, I don’t see how it’s possible.
So, the premature attempt to ratify the constitution for a taxing world government back-fired at Copenhagen. The climate conference in Cancun is going to be a flop, too. The conspirators are scrambling to save face. Russia, China and the other secondary powers are floating all sorts of blue-sky proposals for global monetary reform. I’m enjoying the show but it’s not going to last. Sooner or later, somebody’s going to make a move and things are going to get serious… economic warfare… military warfare… rinse, repeat (remember the economic warfare of the 1930’s… of course it had nothing to do with WWII.)
Clayton -
Hi Clayton, I agree with you, especially the third paragraph with special focus on bolded words
" I think we’re stuck in a monetary twilight zone right now because I believe there is a Titanic struggle going on behind the scenes. The elites have been planning for decades (centuries?) to implement a global fiat currency with a single, world central bank as an intermediary step to a world government (Hoppe). The problem is that, like any cartel, how do you ensure all members abide by the agreement? Short of a world-wide assassination squad with the ability to take out anyone at anytime, I don’t see how it’s possible."
I beleive fiat money will remain to be the choice of governments, and even printing more of it unbaked with anything, not even dust!
With the current global situations this is the only and easiest way for governments to settle the debts.
I beleiveve it will be the individuals who can change “their” situation by switching to real assets not to banknotes. I feel there is a trend already forming to switch their savings or part of, to gold, silver. land, houses…
Aren’t they basically the same thing since since historically a gold standard has always emerged from from competition among competing commodity monies?
Actually no, lots of different things have been used as money in lots of different times and places. And the most common form of currency, historically speaking, is actually a bi-metal/silver standard, where silver is used by most people and gold is only used for large/expensive purchases.
I actually think a modern, complex economy will have multiple forms of competing money. But like a lot of things thats something no indvidual can know for sure, and must be worked out by teh market.
The total gold reserves on Earth is 1,580,034,500 ounces according to the usdebtclock.org. The world population according to wikipedia is 6,887,200,000.
If distributed evenly that’s only about 1/6th of an ounce per person and we’re out of gold. I don’t think it is plausible to go to a wordwide gold standard. The price of gold would have to be so high that a six pack would cost a speck and you’d get your change in molecules. I don’t know about you but I drink too much to keep up with all those molecules.
Well you can always issue fiduciary media on top of the gold reserves.
scineram wrote the following post at Sun, Dec 12 2010 5:44 PM:
Well you can always issue fiduciary media on top of the gold reserves.
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Of course you’re right. The whole molecule thing was tongue in cheek. But it would give a insurmountable advantage to the gold miners. A single ounce of gold discovered would equal the net worth of 6 people. This would throw the world economy in disarray. Why bother growing corn when you can possibly earn more in an afternoon panning for gold.
If distributed evenly that’s only about 1/6th of an ounce per person and we’re out of gold. I don’t think it is plausible to go to a wordwide gold standard.
What matters is not the quantity of gold you hold, but what that gold is worth in terms of economic goods (i.e. purchasing power).