Why Sound Money?

[Travlyr]

Honesty vs. Dishonesty

Sound money is honestly earned. Effort is required and the rewards are huge for those willing to produce something of value. One actually must produce something to 'earn' honest money. They must grow something of value; mine something of value; or manufacture something of value in order to earn their way through life.

Fiat currency is dishonestly created by force. There is no effort involved for those with that privilege, and it requires a monopoly to maintain it. In other words, thugs (FBI & Secret Service) must hunt down competition and take them out in order to keep the monopoly. A computer can create currency, but a computer cannot create money.

That difference is not taught in pubic indoctrination systems. That difference is the difference between prosperity for individuals with limited government and poverty for individuals with gigantic government.

Sound Money FTW!

[Steven Douglas]

Sound money is honestly earned. Effort is required and the rewards are huge for those willing to produce something of value. One actually must produce something to 'earn' honest money. They must grow something of value; mine something of value; or manufacture something of value in order to earn their way through life.

What I put in bold above distills what you wrote as the essential defining characteristic of sound money, but only as it exists in free and perfectly competitive market.

Pro-fiat counterfeiters and pro-currency-debauchers will attempt to argue that people also place value on fiat currency. However, the very existence of fiat currency is proof in itself that there is no free market where currency is concerned. Legal tender laws trigger Gresham's Law automatically. Bad money drives good money completely out of circulation under any regime where people are forced to accept bad money as on par with good. The bad money will drive out the good money because debtors will prefer to use bad money as payment.

The government completes the circulation circle. The act of requiring debtors to accept fiat currency "legally tendered" as payment of debts (or else the debt may be discharged without payment by the courts) is pernicious in and of itself. But that's only the lesser half of the harm, and only part of the market distortion involved. At least with the free market someone MIGHT accept another form of tender in payment of debts. The same is NOT true of the government, which REFUSES ANYTHING ELSE BUT LEGAL TENDER in payment of public debts. That refusal to accept anything else forces literally everyone who incurs a public debt into that fiat currency regime, which in turn props up its ARTIFICIAL DEMAND and ARTIFICIAL FIAT VALUE.

If a government declared that the only acceptable payment for taxes was truffles, the artificial fiat "value" of already rare and expensive truffles would skyrocket overnight. The artificial value increase would be FOR NO OTHER REASON than people must acquire truffles as the ONLY form of payment accepted by the state. How fortunate for truffle producers, along with breeders of truffle hogs.

Just a quick note on terms like "earned" and "produced". The concept of "earning" is not only incidental, but should be ignored, disregarded entirely. While it is generally true that most real value is earned, it is not a universal rule, nor is it required for a thing to have real value. I can stub my toe as I stumble across the tip of a one ton gold nugget in my backyard. That gold is sound money that has real market value regardless how it was acquired or obtained. The value belongs to me as the owner based on OWNERSHIP rights, which also can exist without regard to efforts, or concepts related to "earning" or "productivity'. Else we should say that found wealth=earned wealth, just as inherited or gifted wealth=earned wealth.

UNsound currency - not "money" - has multiple defining characteristics, just as PM specie in a free market has defining characteristics that make it sound.

1) Can be produced, duplicated, or otherwise multiplied with minimal effort. (nothing wrong with that in and of itself, so can autographs and iPods)
2) The market value of the currency's material constituents is always far less than the market value of the same material in any other form (e.g., base metals, paper, plastic, ledger entries, bytes on a computer) - again, nothing wrong with that, the same can be said of autographs, iPods, artwork, magazines, you name it.

Which brings us to the only real defining characteristic that must be attacked:

3) Requires special legislation for it to have market value higher than it would otherwise have in a free and perfectly competitive market.
4) The above includes preemptive targeting, regulation or taxation of substitution alternatives in any way that makes them artificially less competitive.

That's not just unsound money. That's unsound anything at all. If the market value of currency, insurance, health care, education, housing, or anything at all, increases, decreases, or otherwise becomes distorted as a direct result of special targeted legislation, its value is unsound to that extent, even as winners and losers are automatically and systemically chosen by the process itself.

[Travlyr]

What I put in bold above distills what you wrote as the essential defining characteristic of sound money, but only as it exists in free and perfectly competitive market.

And that is not really Utopian. We ought to be living honestly with each other in peace. There is no excuse to live under the dishonest fiat money system and war economy anymore. End the police state. End The Fed.

I hope to see the implementation of honesty in my lifetime. I keep talking about sound money because life would be so much better for the masses if the elite class was not allowed to steal from everyone and control them. However, I don't know how to get people to truly understand it.

I would love to see a movie of what life would be like if the money system was honest. People would be in control of their own destiny.

It sucks having our hands tied by central planners.

"I am afraid that ordinary citizens will not like to be told that the banks can, and do, create and destroy money; and they who control the credit of the nation direct the policy of governments and hold in the hollow of their hands the destiny of the people." - R. McKenna, Chairman, Midland Bank London