The problem isn’t what currency IS, rather that it is MANIPULATED in a CLANDESTINE way with no BACKING by an unseen GROUP. Hence, get rid of the GROUP, store something of VALUE in a warehouse that has OPEN and PUBLIC audit, and you get rid of MANIPULATION.
As defined by the Constitution, the only thing Government can do is coin metals and establish weights and measures. It is not a loan agency. It merely certifies purity and weight and no one else has the right to do that. You could bring raw material to the GOV, and for a fee, they will certify purity and put it in a coin form which is a seal of authenticity.
That’s the principle anyway… we all know how it worked out.
Currency is kind of evil to society in a way. It used to be that people traded items of value ( nails, livestock,etc.) that they made/raised themselves by learning a trade handed down through generations. They spent most of their lives perfecting the trade and passing it on to the next generation. You product was your currency, hence, the better product you made, the more it’s worth. When currency (coin) came in to the picture, now people can do multiple things with the end goal of the currency rather than the product. Now they could float around and do different things instead of just one thing because in the end, they were going for the currency (coin), and trading the currency (coin), rather than the product. It diluted knowledge. People became Jacks of All Trades and Master of None. Maybe it was necessary for society to go forward but I feel it brought down human knowledge as a whole. It’s why finely crafted products are outrageously expensive today. Hardly anyone knows how to make things anymore.
Sorry to play Mr. Hyde to you, Mr. Jekyll, but I must disagree with your view of currency. In the good old days,your product was not your currency as you claim it was, but what you traded for currency. Only when you traded it in a barter situation could it be construed as currency, or a mystical union which made it both product and currency as it was being handed over during the trade, but which ceased to be for the new owner as soon as he viewed it as a product or commodity, assuming he didn’t plan to trade it further for a new product on the open market. In that case it would still be a currency.
Your dim view of currency continues "“When currency(coin) came into the picture, now people can do multiple things with the end goal of the currency rather than the product. Now they could float around and do different things instead of just one thing because in the end they were going for the currency(coin), and trading the currency (coin) rather than the product. It diluted knowledge.”
I think currency (coin), be it hard or fiat, is a wonderful invention that gets commodities to the people that want them the most more efficiently than any other system, and without coercion. You say “now they could float around and do different things instead of just one thing because they were going for the currency.” Well firstly, in modern society, going for the currency is synonymous with going for the product, since virtually everything is available for a price. In the old days, currency wouldn’t get you a lb. of sugar if you ran out and the town had too; you just had to wait for the next spice ship to dock.
But when you say, “now they could float around and do different things instead of just one thing” it sounds like you’re criticising banking, and various clever inventions like the mortgage, which makes it possible for millions to live comfortably in shelters for years, instead of out in the cold and rain of the field. The problem I suspect is not with banking, but with various fraudulent banking practices like fractional reserve banking, the FED, Federal Deposit Insurance,fiat currency, and permitting absurdly dangerous schemes like the subprime loans while concurrently insuring those loans and practices. Grammeen(?) bank is showing that banking can be virtually 100% socially positive, though I’m certain a communist or anarchist/nihilist might well disagree. Get rid of these frauds in the financial system and there will be no problem. And society needs to try this experiment of raw undiluted capitalism in a modern, developed, affluent society that is pro-capitalist in is everyday ideology, i.e. the USA, which is why even the faint prospect of Dr. Paul’s election is so exciting.
Finally,“it diluted knowledge” you claim. On the contrary, it vastly multiplied and disseminated it. The book publishers of Renaissance Italy were amongst the first big capitalist businessmen in Western Europe. The currency employed in buying and selling of books brought knowledge to every corner of Europe, causing a rapid escalation in scientific discoveries during the next century. This both dispersed knowledge, and concentrated it in the libraries of the first bibliophiles. Additionally, these big Renaissance capitalists were also book nuts,—that’s how they got into publishing—, so they had lots of interesting ideas floating around in their minds, while being the only ones around with enough capital to be able to realise those ideas. They conceived a palace in their minds; their will said “Build it!” and a few years later there it stood, for the whole world to gaze on for hundreds of years. No wonder they loved capitalism!
I don’t even think there would be anything wrong with a fiat currency if: 1) completely accurate statistics for the macro-economy (of the US lets say) were available to investors in real time 2) the FED were always right in its interest rate adjustments 3)the FED were incorruptible, and always judged objectively, 4)the National Debt were paid off. (even a freeze or freeze and reversal only on national debt might work), and 5)precious metal futures markets were open 24/7 —if other markets like currencies, oil, and base metals were also open 24/7, so much the better. But the first 4 qualifiers above are pipe dreams, so we’d better just scrap the FED, realise that the only highly predictable models work on microeconomies only, crush our debt and move towards a hard currency, and trust to the market to set interest rates.
Too bad the Fed never adopted Wayne Angell’s idea of the Fed pegging the dollar to gold at $350/oz and working the interest rates up and down to keep it in a $325-375 range. Since it was roughly 10x the old price of gold, it would have been easy for the man on the street to figure what his current wealth was in pre-FDR dollars. If we’d have kept our debt rock steady, I think it would have worked until such time as the FED were finally packed with corrupt officials. But Wayne Angell had too much common sense for the FED.
Well it helps if you understand the business of banking and bank note issue, as well as the economics of coinage.
Regarding coinage, gold standard requires either a manufacturing operation to manufacture gold coins fit for circulation. This means about 10% copper to make it hard-wearing. I don’t think existing mints manufacture coins that are hard wearing and fit for circulation, so unless you can find some significant body of coins you’ll have to get into manufacturing. This should probably not be done in Africa, Asia would probably be more cost efficient and able to be regularised, but check the local regulations to make sure you’re allowed to do it.
Regarding coinage, you have to realise that gold coinage is useless for low value transactions, since a small gold coin is about 5g which is worth about USD100. To provide a usable system of money you need small change, which I believe are best suited to bank notes issued in the form of metal discs, payable in aggregate in gold coin – look at the history of coinage and small change and it was common at times where there was a shortage of small change for merchants to issue such redeemable tokens, and the authorities tolerated them because the people needed small change.
To issue bank notes, whether in the form of paper/polymer or metal discs, it helps to have a financial services operation to combine it with, especially one that provides transactional banking services, and currency exchange services. If your bank notes are bankable and exchangeable, then they will be more marketable and useful. Also, a lending operation enables you to put the funds received from issue of notes and from acceptance of funds on deposit to current account and term deposit to profitable work, and to pay for the costs of maintaining metallic reserves.
"Only when you traded it in a barter situation could it be construed as currency, "
Uh yeah… currency is just a middleman. The only reason gold succeeded was that is was scarce, it didn’t spoil, it could be easily divided and their was nothing better that came along
“But when you say, “now they could float around and do different things instead of just one thing” it sounds like you’re criticizing banking, and various clever inventions like the mortgage, which makes it possible for millions to live comfortably in shelters for years, instead of out in the cold and rain of the field.”
Ya that’s working out great right now isn’t it. All banks are evil period. And so are their servants.
“I don’t even think there would be anything wrong with a fiat currency if…”
There is no IF in fiat currency. It is robbery. It always has been and has always ended badly.
Economics is BS. Simply because our whole world is based on fiat currency, which is a game of lies and distortions. You can’t make up charts and equations to make something true that is a flat out lie. There is nothing hard ( as in, to understand) about currency. It either has value or it doesn’t. If someone doesn’t want to accept a dollar, it has no value no matter what is printed on it. How many charts and equations does it take to figure that out? If you think economic strategies are going to protect you when rioting and society brakes down, you are in for a sorry surprise. If you don’t know a LIFE NECESSARY SKILL, you are going to starve and die. If you can’t grow your own food, build a house and do a little frontier medicine, you are FUBR. Better make it a point to live near a small farm with sustainable practices. Gold is only going to get you so far. You can’t eat gold.
Good warning sign when not to take someone seriously. A lot of what passes for economics is indeed BS - now why let those who promulgate it get away with it?
First off, I do not believe in a gold standard. I believe that money should be backed on “faith”, whether the government or another enterprise such as the free market. Money only serves as a medium of exchange to elimanate the double coincedence of wants. Money does not need to be back. Only a mutual understanding of exchange needs to take place. Money makes this happen, but not a gold standard.
Money is worthless. That is why I would recommend that you lend loans to people who produce and not consume. Production is worth and consumption is worthless. Only the production of goods are worth something. We exchange our production value and not our consumption value.
Back up your money any way you like, but it will fail if you lend it to consumers. Somolia will never take of as a country.
Backing money by “faith” alone is usually disasterous, and a recipe for big problems. But a “faith” currency is actually based on interest rates. If my fiat currency yields 5-7% at the bank, and inflation is running 1-2%, while gold prices average 0% annual increase, then I am better off with a faith currency than gold (during market hours — but when the banks and the commodity markets are closed, the fiat currency owner is at much greater risk than the gold owner). That’s why I think a fiat currency might be a possibility, if the treasury ran no deficits or even a surplus, and if inflation was truly 3 to 5 percent below the T-Bill/BankCD rate. Franklin points out that the real value of money is not the amount of gold or silver it respresents, but the amount of labour it can command. I would agree. So, money value can be fairly well delineated by interest rates and wage rates. But having a “hard” or partially “hard” currency is even better; it can be backed by gold, silver, a basket of industrial commodities, a partial pegging to other “sound” currencies (of which there are currently none), in addition to the free-floating interest and wage rates just mentioned. It could also be backed by public lands, if public lands are permitted in the society in question (and might be what America might have to do soon if unfortunately, as the probabilities indicate, we get another collectivist president. However the probabilities at the start of the Revolution indicated that the Brits would hold on to their colonies. Nils desperandum!).
Allowing the consumer a choice between various currencies would also give the market a voice in choosing what currency was perceived as best, although I think this is currently the case, for the most part, due to the existence of financial and commodity- futures markets.
Freeze the country’s money supply. Gut the powers of the central bank and blow up the printing presses if you have to.
Limit the amount of government currency in circulation. Issue a new design and use polymer for longer circulation. The new design is just for replacing worn out notes. And this time, keep track of the serial numbers so everyone has an idea of how much actual amount of money is in circulation (after awhile).
Allow people the free conversion of foreign currencies (No more “Official Exchange Rates”) and abolish all rules regulating who can hold them.
Remove all taxes on commodities (Copper, Silver, Gold, Oil, etc.) so they can be used as stores of value.
Allow anyone to issue a parallel currency to the official (old fiat) currency, provided that they are 100% backed by commodity.
Allow anyone to issue notes on the condition that have double the value in reserve from their own finances, not that of the depositors.
Allow anyone the right to mint his own coinage (particularly minor coinage) provided it is of an common commodity, purity, size, shape, and weight. (If its 20 grams of 95% copper, then who cares who’s face is on it.)
No more central bank bailouts. Let the wildcat outfits and fraudsters face their own clientele (who will all be carrying heavy blunt instruments of some sort, proceeds to be aired on pay-per-view.)
Tell the whiny cry-baby socialist public to quit asking the government for rulings and just figure out something on their own if the system hits some snags.