Yeah, and its “easy” for MeatCo to put 15oz worth of hot dogs in a package labeled one pound. Somebody finds out, then customers flee from all MeatCo products and probably goes out of business.
So our government “protects” our currency? Here is the “shaving” by the government since 1913: http://www.aier.org/images/stories/charts_large/ppd_lg.png
No it is not true for every business and home… That is petty cash. It is true for oil companies and goods we import from china. We spend 400 billion dollars a year on oil.. That money accumulates.
The federal reserve works independently from the government, besides.. i’m talking about state controlled money, not federal.
A quick back-of-the-envelope calculation from Wikipedia’s listing of official gold reserves shows that there is about 8/10 of an ounce per person (men, women and children) on the planet. Of course, gold is massively under-valued compared to the value it would have if widely used as a circulation currency, meaning that there is much less gold in the world than there would otherwise be.
Clayton -
Who owns the gold??
hahahahaha! socialism leads to overpopulation? Where did you come up with that one?
You keep comparing apples to oranges, you can’t compare meat you buy at the shelves to millions or billions of dollars of inflation.
O rly?
Small banks couldn’t lend to big banks? Small banks would just go into perpetual debt with big banks until they ran out of money? Big banks would loan money knowing small banks would never be able to pay back all that “evil” interest?
Wrong. There is no honest banking unless banking is 100% reserve.
It’s easier and far less noticeable to print a bunch of paper. Oh wait, that’s what the government does.
Ever seen those little ridges on the sides of coins?
Right, because whoever receives interest is going to hoard that money and never spend it. That makes a lot of sense.
The person who borrows for the purpose of investment only borrows because he believes he will make enough money through his investment to be able to pay back not just the principal and the interest, but also to keep some for himself. If he wants to blow the money on consumption, so be it as long as he can pay back the principal plus interest. If he doesn’t think he’ll be able to do that, then he won’t go into debt in the first place.
Why not? If you are the producer of a currency and you debase it, you will lose out to your competitors who will produce a better and more reliable currency than you. Think about it. If a company sells meat by the pound, but “shaves” off a few ounces here or there and still charges the price by the pound, do you think people are going to stay with that company or switch to a more honest competitor?
How do you figure? How much gold is “needed”?
No, it’s rare simply because it is not because there isn’t “enough” of it to go around (supposedly); and it’s valuable because people subjectively assign it value.
Who cares?
That is what government’s only purpose should be, but neither of those are true. The government today serves itself and constantly infringes on property rights.
It’s not in any producer of money’s interest to inflate or debase their currency so why would they do it?
Why would anyone select a commodity that can be mass produced and debased as the medium of exchange? A competitor would quickly arise and create a better currency that people would switch to. In other words, no one is going to produce a medium of exchange that can be mass produced.
You won’t find many Austrians who disagree with this.
It’s not economically feasible, yet it has been chosen over and over in history as the medium of exchange… hmmm.
If there were a true free market in money, who knows what would happen. Maybe gold would be the medium of exchange, maybe not. Maybe it would only be used for large transaction with silver used in day to day transactions. Who knows.
Which is why all fed chairmen do the bidding of the economic policy of the president.
Of course. Just like every successful grocer, car mechanic, doctor, manufacturer, shipper, and every other business imaginable will always end up with more money than they spent on overhead. It’s called “profit”, and it’s how economies survive.
No; there are only a select handful of banks because the state makes it almost impossible to compete with those that already exist.
The quantity of a commodity is irrelevant when determining its value in use as money. You could cut the amount of gold in existence down to 1% and prices in terms of gold would drop to reflect the change; or you could increase it tenfold and prices would likewise increase.
Luckily, with metals (unlike paper notes or digital currency), that’s not likely to happen. The amount of gold in use as money has not doubled in over 2000 years. The amount of dollars, on the other hand, has increased to thousands of times its original quantity since the state siezed control of the money supply in 1913, with substantial decreases in the meantime due to the state’s manipulations through the Federal Reserve.
Right; which is why it’s so important to allow free entry into the market instead of concentrating it in the hands of a few, government-approved institutions. Or worse, in the hands of the government people themselves. In a free market there would be literally thousands of institutions, all vying for the custom of hundreds of millions of people, and their profit margins being constantly whittled down as they compete the better to serve their customers.
That’s what competition does. Monopolistic privilege, which is inevitable wherever the state involves itself with the economy, allows profits to soar even as the customer suffers worse abuses all the time. Abuses such as compound interest and the devaluation of currency are the product of government privilege; of state-elected institutions being shielded from the unlimited potential for competition that they would face in the market.
Usually is, yes. It is possible for inflation to occur naturally - when, for example, a new cost-saving industry frees up money to be spent into the economy - but inflation is usually the result of the creation of excess currency by a bank or government. In other words, inflation is theft in the sense by which it is synonymous with counterfieture; when it involves the defraudation of those who hold capital against which new currency is printed.
The government is the greatest perpetrator of rights-violations. It cannot, does not, and never will be able to protect property rights. Rights can only be protected by individuals or through voluntary organizations of individuals, of which the state is neither. It does not matter what the state is supposed to do in theory; in reality it is nothing more than the most successful criminal organization in a given territory.
By making the defrauders pay restitution, as I mentioned, to those who were defrauded; and by including in such restitution a punitive amount. It would be fitting to cause interest to be paid on the amount stolen according to the rate of interest charged by the institution (assuming the bank lends money as well as holds it, which need not be the case).
Specie is rare metals, by definition. Other commodity currencies would exist in a free market, but would be limited only to special cases, and those who choose to use them would have to be aware of their instability. It would be no secret; in fact a lively speculation sector would condense around them, whose existence would help to stabilize them to some extent.
And of course a currency would be devalued by an increase in specie. That’s why specie is important: the rate of change in its quantity is miniscule compared to other commodities, but especially compared to fiat currency.
I’m pretty sure I’ve read everything by both Locke and Paine. In so doing, I determined that the principles are fantasy. The idea of giving any group of persons, however constituted, a territorial monopoly on legalized violence (which is the definition of the state) and then expecting those people to be the protectors of individual rights is about as sane as putting a paedophile in charge of a daycare.
Government is not, as Paine thought, a “neccessary evil”. It is instead a plain evil of such great power that it has been able to convince people of its neccessity.
O rly? Wow, I’m glad you’re here to tell me how much I don’t know about the enemy against which I have dedicated my life.
I’ve never heard that theory before. Please explain.
It’s a quote from his famous pamphlet, “Why Socialism?” wherein he demonstrated his utter lack of knowledge about history and economics. He was a brilliant mathematician and natural theorist, but he really ought to have stuck to his field. On the other hand, I’ve done quite a bit of research on those topics, by which I am quite qualified to “trump” Einstein, whose only exposure to them was reading Das Kapital and The Communist Manifesto and a few Marxian critiques of classical economics.
Yes; the use of most of which was limited to very small areas of industry or geographic locations. And as with all goods in the free market, the best - that is, the most reliable - were the most widely-used.
No I don’t. The government tends only to prosecute those thieves who encroach on their own territorial powers of plunder.
Good question, but you just implied the answer. If people will only accept “good” currency, then those who issue currency will be eager to prove that theirs is worth accepting. They would subject their currency to regular audits by independent organizations, who would publish ratings on quality to the public; much in the same way that electronics manufacturers are quick to submit their products to companies like Underwriters’ Laboratories. Because even though you can go to fly-by-night operations and get a cheap, uninspected waffle iron, the real profit flows to those whose products bear the UL stamp. And it takes little time for those fly-by-night firms to go out of business.
In like fashion, most issuers of currency would invite auditors to evaluate them, because to refuse an audit would practically be an admission of unreliabilty, insolvency, perhaps even dishonesty - and nobody except great fools would accept an unevaluated or underevaluated currency. And in turn, the auditing firms would be incented to provide capable and honest evaluation, for as soon as people realized that they had been promoting “bad” currency, nobody would go to them for their opinion, and honest currency issuers would switch to other auditors in their eagerness to have their currency accepted by businesses.
