If the penalties for "over printing" are draconian as I believe they ought to be with officials spending the remainders of their miserable existences in solitary confinement, I believe that the problem will become vanishingly small.
Forgive me, I have not yet read the cite you provide - dial up sucks... one of the minor disadvantages of living in the middle of nowhere. So please forgive any errors I may make here. My amendment allows for an arbitrary number of currency systems, private or otherwise. Nobody is bound to use one only or any given system. Use what works - use that in which you have confidence. In such a wildly free and competitive market, the good ones will edge out the others, will they not?Secondly, you can legitimately bind the government to use the kind of money you specified (and I like that! Good work!) but not the people. Your amendment violates the Benson Principle (please see http://www.ldsfreedomforum.com/viewt...p?f=19&t=12347 ) because it gives the government authority that cannot be delegated to it by the individual. Do you have moral right to force your neighbor to transact (or not to transact) in specific currencies? No.
That all said, in some way I do have the right to require a given currency. If I am selling my car and I will accept only platinum or gold ounces for it, that is my prerogative. If you do not have any or are otherwise unwilling to make that trade, then you do not buy my car. It is as simple as that. We either reach a mutually satisfying agreement or we do not. Freedom of choice cuts both ways.
Understood and agreed, but I do not believe this to be the case with the amendment I contrived. Could you please explain to me how it would be so? I just cannot see it, for some reason.Therefore you cannot delegate this authority to your government, because you cannot delegate an authority you do not have.
We are in violent agreement.Freedom works. Remove government force from the realm of money, and you will allow the operation of unfettered free market; when that happens, government fiat will end because it cannot operate without government force and coercion; thus 100% commodity based monetary system will freely arise, because it is the most honest and stable monetary system known to man, and therefore it will be the free choice of the free market, because no one likes his purchasing power being stolen by government’s printing press. Freedom works. It is the only thing that does work!
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Originally Posted by osan
That said, I ha ve no porblem with fiat currency in principle.
Conjured out of nothing is, in principle, irrelevant. If every dollar that is printed accurately and faithfully covered precisely that much "added value" that enters into an economy, there would be no trouble at all because that piece of paper would, in fact, represent REAL and tangible value. The other side of that might be a requirement to destroy notes that represented value lost. How that would be accomplished would be anyone's guess. This, of course, is all hypothetically speaking in terms of pure principle. In practice, as I mentioned, it is not workable. We must also be keenly aware that "value" is a very subjective concept, and this is well demonstrated at the auction house where some item is put up for bids. People bid what they feel the item is worth. At the outset it is worth nothing because nobody has yet bid. If nobody bids, the value remains at zero. If an opening bid is made, the auctioneer works it until bidding activity ceases and the highest bidder wins. What was the value of the item? There was no single value attributable to it, but probably a plurality of values, each for a given bidder. Value floats and that complicates things. Nevertheless, having a measurable and stable currency takes one big step in reducing that complexity, but loss of "value" is possible in any case. When times are tough and food scarce, its value rises. Your $20MM in gold bouillion may not buy you an egg in certain circumstances... and you cant' gain susenance from eating gold.Enlighten me please. By definition (http://dictionary.reference.com/browse/fiat+money) fiat money is conjured out of nothing and then forced by the government upon the people. Therefore the government who issues and spends such fiat money is able to lay claim to peoples’ goods and services in exchange for worthless paper. How is that just? How is that not plunder? How is that not SOMETHING for NOTHING? Which is actually a definition of theft and fraud.
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Originally Posted by osan
Consider gold coin - If I debase the specie 10% from .900 fine to .810 fine, I have upped the supply by 10% (actually a bit more) and who is going to know? How many people spend their days assaying the coinage?
Agreed.Even though 100% commodity based monetary system is not 100% counterfeit proof, it is INFINETELY more legal-counterfeit proof than fiat, because fiat itself is fraud. It is MUCH, MUCH easier to legally counterfeit in 0’s and 1’s than in gold bullion! So we must use the system that is the most stable and honest, that we know about.
Agreed with the caveat that this assumes "normal" conditions and nothing extreme such as severe food shortages.Secondly, the purchasing power of say gold, tends to increase with time, so when you come out of the comma in 20 years (per your example), if your savings were in gold currency, your purchasing power has actually increased, (rather than being stolen as in fiat case)! A great thing for those who save money say for a retirement!
No argument from me.So 100% commodity based currency, especially gold and silver, approach your perfect system most nearly!
That’s why I said 100% commodity based monetary system is the most honest and stable monetary system known to man!
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Originally Posted by osan
My first blush swag at a immutable unit of value could be "time". Thoughts?
Forgive my imprecision. By "time", I meant units of time for which ione is compensated. A 10-hour bill denotes 10 work hours. The problem there, of course, is the differeing values in the times of different individuals. That of a garbage collector... erm, I mean "sanitation engineer" is not equal to that of a neurosurgeon. Then again, some may argue that it is. This is the inherent problem that perhaps cannot be solvable.Problem with time is that you could get sick, or your debtor could get sick. How are they going to trade you their time?
The best solution, of course, would be the invention of Star Drek style replicator technology whereby a person's every material need is attainable for the mere asking.
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In any event, we agree on commodity basis. Adding other precious metals may not be a bad idea, especially to combat the dullards who speciously assert that there is not enough gold to go around. Rhodium, ruthenium, rhenium, tungsten, iridium, osmium... these would all be suitable additions to the commodity pool.
I would still insist on denominations based on hard measurement. Pounds, ounces, grains... or if we want to go all metric-***, then kilograms, decagrams, grams, milligrams...
Each certificate would represent precisely its face value measurment in the metal it is assigned. "Ten grains fine gold" and so forth. The problem I see, however, is the inter-specie valuations. Hwo are they etablished and is it reasonable to give them an immutable rational value? for example, oen ounce of gold may be defined as 20 ounces of silver, thirty five ounces of tungsten, 1/2 ounce of rhodium, 3 ounces of iridium, and so on. Without a constant relative value, pricing of retail items would become a nightmare, and with so many commodity metals backing the notes, pricing will be tough in any event. That is the virtue and cenvenience of units such as "dollars", but they really cannot be trusted IMO due to the corrupt nature of far too many human beings, most of them occupying governmental positions wherein they can screw the pooch far too easily.
Couterfeiting would still be a major problem and in a convertible system it becomes a far worse issue.
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