News & Analysis
Bernanke Fights Back Against a Gold Standard
Bernanke says gold standard wouldn't solve problems ... Federal Reserve Chairman Ben Bernanke on Tuesday took aim at proponents of the gold standard, saying that such a system handicaps the government's ability to address economic conditions. Bernanke spoke in the first of a series of four public lectures at George Washington University that is the central bank's latest effort to counter a raft of negative public sentiment that has arisen from its handling of the financial crisis. The former Princeton economics professor delivers a second lecture on Thursday and two more next week. – Reuters
Dominant Social Theme: Take your gold standard and shove it.
Free-Market Analysis: Ben Bernanke has come out forcefully against what may be seen as a burgeoning support for a monetary gold standard in the financial community and among the alternative media. This is newsworthy, because it begins to show what the power elite REALLY thinks about a gold standard.
The power elite that wants to create world government certainly does want a universal money. But, what it likely doesn't want is a money that is available to anyone who can dig it up.
We know this is anathema to the power elite because they spend considerable time and energy shutting the door to methodologies of money generation that are NOT controlled by them.
Whether it is Wall Street itself or a myriad of other monetary and financial activities, the elites make it difficult to generate capital in ways that are not supervised by their agents and enforcement officials whenever they can.
The elites do this via mercantilism, by controlling governments and creating laws that support their own enterprises at the expense of others. They then create support for these manipulations via dominant social themes.
These dominant social themes are fear-based promotions that frighten middle classes into giving up power and wealth to facilities that provide global governance. The goal of the elites seems to be a new world order with a new money and a universal government. There are indications that the elites wish to cull the larger human population dramatically as part of this evolution (see Georgia Guidestones).
While some in the alternative media community have claimed with increasing fervor that the elites DO want a universal gold standard, this has never been commensurate with the way the elites operate.
The powers-that-be have been fighting for fiat money (under their control) for centuries. Beginning with European and British central banking perhaps 500 years ago, the elites have been steadily moving away from commodity-based money and toward pure paper that is easy to print and easy to inflate.
The most significant movement to oppose the elites' affection for paper money has been the Austrian, free-market economic movement with its emphasis on "honest money" – a full-fledged, one-to-one gold standard.
In the past decade, however, as the Austrian movement has gained considerable popularity and clout, the preferred position on money seems to have evolved to one of monetary competition, which this modest paper (the Daily Bell) favors.
Money is what people make of it, and while we believe that societies at least in part would settle on some sort of private, fractional gold and silver standard, it is only through the free market itself (monetary competition) that a utile and useful monetary standard can be ascertained.
It is surely not the advantage of central banking generally to face monetary competition, as the only thing that keeps central banks in business is their monopoly control of money production.
Central banks – especially the Federal Reserve – are private in one sense and public in another. This is the way the elites work in fact. They use mercantilism, the conflation of private goals with public mandates, in order to cement control of society.
By ensuring their own goals and desires are enshrined into law, elites make their success mandatory and criminalize its failure. Thus, a private money-making machine like the Federal Reserve has been enshrined into law.
Congress passed an enabling act for the Fed in 1913 and subjects the Fed to considerable scrutiny while also controlling, along with the president, the appointment of its head. Without Congress, there IS no Fed, and this is true around the world. Everywhere you go, central banks have gained the willing or unwilling support of the governments they supposedly support.
Of course, in reality, central banks are apparently controlled by a handful of dynastic families that use the hundreds of trillions within their control to push the world toward global governance.
It is not in their best interest, of course, for these families and their enablers and associates to give up fiat money. At best, these families may wish to subject the world to an ARTIFICIAL gold standard controlled by THEM. But a free-market gold standard is not something that is in their interest.
We know this because the US itself was on a gold and silver standard once upon a time before the Civil War. Certain sophists and wily ones will make the argument that a gold standard especially is sought by the elites, but we know this is not true because the elites destabilized the US gold and silver standard and, in fact, fought a US war in the mid-1800s to implement paper money.
The argument is that the elites control all the gold (they don't) and therefore any gold standard will inevitably be controlled by them. But if this were truly the case, why did the elites evidently and obviously create a war (between the states) to implement paper money?
In fact, within the context of a private marketplace, it is impossible to sustain a monopoly. It is sophistry to maintain that people, freely trading, will support a monopoly not to their liking. The only way an elite can control the market for gold and exercise continued Money Power is via mercantilism and the continued control of government. A free market in gold and silver would deal death to their designs.
Money power fears terribly a free market in gold and silver. All their patiently hoarded metals would go for naught. They could spend every bit of it trying to manipulate fee markets and at the end would have nothing to show for it but an empty checkbook and frustrated connivances. For this reason, the "war between the states" was prosecuted. Money Power needed to regain control of money in the colonies.
Some will maintain that the war was about freeing the slaves, but anyone who looks closely at the historical record will likely come to the conclusion that the New York/European banking establishment was behind the Civil War and that its real goal was to minimize US exceptionalism and reduce the power of the republican experiment as regarded both free money and a free society.
The elites have been fighting FOR monopoly fiat money ever since. It is no coincidence that some 150 central banks now occupy most of the world's countries, when there were but a tiny handful 100 years ago. The elites have sought forcefully to emplace private/public central banks throughout the world and have succeeded in doing so.
It makes no sense, then, that the elites would now wish to revert to a free-market gold standard, much less to a gold and silver standard. Such gold and silver standards have been popular throughout history.
Common people can ascertain manipulation by checking the ratio between gold and silver. It's a good way to figure out the manipulations of a given power elite. It is not in the self-interest of central bankers to impose a credible, private market gold standard (or gold and silver) standard, and it is not surprising that Bernanke would come out against such an idea. Here's some more from the article excerpted above:
"Since the gold standard determines the money supply, there is not much scope for the central bank to use monetary policy to stabilize the economy," Bernanke said. "Under a gold standard, typically the money supply goes up and interest rates go down in a period of strong economic activity - so that's the reverse of what a central bank would normally do today."
Embodied by Texas congressman and Republican presidential hopeful Ron Paul, a loud minority advocates the closure of the central bank and a return to a gold standard where every dollar issued must be backed with equivalent reserves of precious metal.
Most economists credit the Fed for acting forcefully by lowering interest rates aggressively once it realized the magnitude of the 2007-2009 crisis. But policymakers, including Bernanke, have been chided for downplaying the housing downturn in its early stages and for turning a blind eye to flaws in the regulatory system that laid the groundwork for the boom and bust.
Some Fed critics argue that the central bank's ultra-easy monetary stance - it has held overnight interest rates near zero since late-2008 and has bought $2.3 trillion in bonds - is paving the way for future inflation.
In the above excerpt we can see the tremendous power that a central bank exercises through its monopoly manipulation of fiat money. Bernanke has "held" short rates near zero since 2007 while injecting trillions into the larger banking economy.
Of course this is nothing but a kind of price fixing. Bernanke is "fixing" the volume and price of money. In doing so, he is presiding over a tremendous wealth transfer from people who earn money to those who haven't earned it and likely won't handle it as well.
Central banking is nothing but price fixing, and price fixing never works. The dollar has depreciated some 95-99 percent since the inception of the Federal Reserve in 1913, and today, given that the Fed has injected literally tens of trillions more into the banking economy, it is very likely that the dollar reserve system is on its way out.
The power elite knows this, of course. The current growing, worldwide depression is of its own design and making as it is a direct result of central banking – the facility, worldwide, that prints too much causing first euphorias and booms and then busts.
The elites evidently and obviously want to supplant national currencies with one international one, perhaps the infamous SDRs supervised by the International Monetary Fund. But in doing so you can be sure the elites don't intend to let the markets themselves control money.
Bernanke would seem to be sending a clear message about that. However, we note that he seems to think he has to do so, and this is probably due to the success that educators like Congressman Ron Paul have had when it comes to money.
Fiat money, Greenbackerism and other inflation-oriented manipulations have been thoroughly vetted in the alternative media and no doubt these discussions have been examined at length by the powers-that-be.
Bernanke's caution about a private-market gold standard is a kind of warning squeak from the power elite that never deigned to address these issues before. That Bernanke, who works directly or indirectly for the top central banking families, has had to issue a statement on the subject is evidence that a great change in taking place in the historical monetary discussion.
Of course, as proponents of what we call the Internet Reformation, we are not surprised. We have long held that the Internet would focus attention on these previously abstruse issues and begin to undermine most if not all of the dominant social themes that the elites use to control people and move the world toward global governance.
Within this context, Bernanke's statements can be seen as further evidence that even the basic memes of the elite are under attack. They must be most uncomfortable now for Bernanke to make this statement.
They must, metaphorically, be making such statements between gritted teeth. It is NOT something they wish to do. They wish to treat monopoly fiat central banking as a GIVEN, something that is never to be commented because it is natural as breathing.
Only it is not. And the billions of words now expended on the subject of this illegitimate and destructive monetary system are likely, finally, having an effect on the powers-that-be. Not even the top powers of the world can keep an entirely illegitimate system in place.
There is, in fact, no place in the world for a system that allows a handful of people to print up to US$50 trillion on a whim to support their cronies while the rest of the world is struggling to get by on a dollar or two a day.
Since entering office in 2006, Bernanke has taken several steps to make the central bank more transparent, including holding quarterly news conferences and publishing policymakers' own projections for the path of interest rates.
This statement toward the end of the article profoundly misses the point, of course. The elites' staggering monetary manipulation has played out over the Internet in the past decade, and its profound IMMORALITY is public knowledge. More transparency is the LAST thing the system needs.
We have been arguing for a long time that many of elite memes are dying or dead thanks to the Internet and central banking may be chief among them. This squeak of agony from Bernanke is further proof that the top powers feel a need to protect central banking and to challenge its detractors.
The trouble is that central banking came in with assurances that it would modify monetary manias and ensure the system stayed solvent and steady for the benefit of the average person. As it has done none of that and has been exposed as horribly unjust and even genocidal system anyway, it is difficult to see how the elites intend to defend it going forward.
The alternative, in fact, is some sort of PUBLIC gold standard or global monetary standard controlled by the elites who have set up the current system. Bernanke's comments can also be seen as paving the way for a further evolution within the context of these parameters. But the LAST thing the elites want is a private gold standard or private money generally.
Ironically, unless they can gain significant control over the Internet, private monetary standards may indeed be in their future, which would jeopardize the entire program of global governance as their funding sources would dry up.
Conclusion: This will likely be the final battle of the Internet Reformation in our view – the struggle by the elites to move away from the failing and exposed central banking system toward another system ALSO controlled by them. Whether they can pull it off remains to be seen. The world's economy would seem to hang in the balance.
Posted by shardannay on 03/22/12 11:32 PM
I'll bet Bernanke will find a problem among his global bankster friends & bosses that gold can solve when they tell him to confiscate OUR gold.
Posted by Bischoff on 03/22/12 07:36 PM
"But that does not stop us from purchasing the right to exclusive use of it, and agreeing to uphold each others property rights."
You don't "purchase" the right to exclusive use, you register it with the county recorder. The amount of money which is involved in changing the exclusive use registration (fee simple title) amount to a "return of a deposit".
The amount of the "deposit" is calculated by capitalizing the annual rent (land value tax) by the prevailing prime interest rate. The exclusive use right is subject to land value tax, invasion of police power, eminent domain and escheat. The eminent domain procedures lately have been an utter perversion of the exclusive use right conveyed with a fee simple title. The Supreme Court has been completely wrong on the matter of Kelso.
You are correct, not even King George owned the land. The feudals held control over land by devine right as declared by the Church of Rome or the Church of England. In the North American colonies, control over land use was exercised by using ancient Anglo-Saxon principles.
The fight in the American colonies, as it is today, it is between the Anglo-Saxon way of government and the Norman way of government, between governance from the bottom up or from the top down.
"The exclusive use agreement is the property, not the land, nor the water, nor the air."
An agreement is not "property". Land, water and air are "real" properties, existing by vitue of nature without intervention required by man. They cannot be owned. They can only be used. Exclusive use right is conferred by a fee simple title.
In contrast stands "private" or "personal" property which exist only due to human exertion (work). It is called wealth and title to it is absolute by virtue of the work component.
Posted by dave jr on 03/22/12 07:06 PM
Here we go again.
Even Ayn Rand said we own ourselves, and therefore own the product of our labors and nothing more. So, did we create the land? Who then created the land and originally owned it? From whom was the title passed down? Well, it was never owned. Not even by King George or any other centralist tyrant. But that does not stop us from purchasing the right to exclusive use of it, and agreeing to uphold each others property rights. The exclusive use agreement is the property, not the land, nor the water, nor the air.
Posted by dave jr on 03/22/12 06:37 PM
I am rooting you out Memehunter.
What you have been proposing amounts to a sactioned depreciating currency.
Tell me what is the difference between a means of exchange VALUE and a means of store VALUE. What is the mechanism that would change the VALUE? It could only be a fiat currency with an expiration that defaults to a "storage" value.
How else could the centralists get away with a negative interest rate for the masses.
Keep talking, I am beginning to understand.
Posted by Bischoff on 03/22/12 06:12 PM
"Oh? What about absolute property rights, starting with your OWN corpus and freedom to do all but prey on / harm others, as guaranteed by the "rule of law?"
Absolute property rights over "land" does not exist. The earth is the heritage for all people. The earth (land) can be used according to rules, but it can never be owned. Absolute property rights over wealth can only be established by adding work on or to land to create wealth. Without a work component, there can not be "absolute" property right.
Therefore, as Land (natural universe) cannot be owned "absolutely" (see Locke), so Man cannot be owned by anyone, not even himself. Man has a right to "Life" given by nature, a right to "Liberty" to make decisions on his own, and the right to pursue living in accordance with natural law. Beyond that, there are no absolute rights, except as it they pertain to ownership of wealth.
Human nature is marked by basic human instincts. They DO NOT change. Man has adapted to his environment not by genetics, but by developing a conscious brain. Nevertheless, basic instincts developed over millions of years for abroreal living are still the main aspects of human nature. They cannot be changed except by genetics.
Wait another few million years, and maybe human nature will have changed genetically.
Posted by rossbcan on 03/22/12 05:44 PM
"where your prescription does anything to give an equal opportunity"
Oh? What about absolute property rights, starting with your OWN corpus and freedom to do all but prey on / harm others, as guaranteed by the "rule of law"?
Then, even if elites own ALL the gold and ALL of the land, should they choose to be unproductive, they will have to give up a slice of their ill gotten "wealth" so somebody will actually provide them (trade) with food and whatever else their sorry souls covet. Then, with the passage of time, wealth will be transferred (peacefully) back to the productive, from whence it came, the ONLY possible source. Not one statist decree, for all of history has produced anything but misery for the majority. The ONLY choice is to respect these values, or, face collective doom:
Click to view link
Unevolved human nature may indeed be lazy "pluckers of low hanging fruit", but, there are too many of us to "hunter gather", so, what is "plucked" is and must be "the productive". WE DO NOT LIKE THIS and, will defend. This is an evolutionaty force, to which mankind once did adapt, the very basis of peace and civilization, now rationalized away by "predators on the bench":
"Be neither predator, nor prey, nor tolerate others to be". Keep the PEACE.
We have collectively made some very WRONG choices, adapted to unsustainability. Those who survive WILL make better choices, one of which is: insure "crime does not pay" (for anyone),
Click to view link
You err in believing that "human nature" is static and unchanging. We adapt, pursuing the survival imperative. This is why "states" are called so. They seek to legislatively stop progress and evolution such that they and their cronies are "on top, master predator".
States play "whack a mole" to anything and anyone who slips the noose of servitude or, has a "better idea" that "rocks the boat", risking sinking the "ship of state".
Am I Taliban? What an absurd question. Clearly, there is fog on your rose colored glasses regarding states and, who is friend and, who is foe.
Posted by dave jr on 03/22/12 05:06 PM
Sentimental value aside, anything of value is not worth storing unless it can later be exchanged. The exchange value presupposes the store value. There is no store value without exchange value, therefore I suspect the motives of those who attempt to differentiate it.
It really IS then a question of time, to exchange now or later. So now time is a factor open to question.
I can now better understand your position, which causes me to ask what your time on this earth is worth? Is it greater than zero? Would you feel justified in asking a fee from anyone benefiting from your product while you wait?
Posted by Bischoff on 03/22/12 04:34 PM
"I see no contradictions with the original "Declaration of Independence". I see great flaws in how this was claimed to be achieved by the US Constitution, and we are seeing and being smited by the costs of the splendor of the "big lie", here and now."
That's why you have to do a little more studying.
The Declaration of Independence and the U.S. Constitution go hand in hand.
The first is the promise, the second puts the promise into action.
There is clamor for the Articles of Confederation as a governing instrument, and I am not sure whether you share that clamor. Let me just say that the Articles of Confederation as governance for the newly created states was seriously flawed. The North American States after the victory at Yorktown turned out to be nothing, but a bunch of squabbling interests to get the maximum for themselves.
Thanks to the prodding by Hamilton and Madison, who saw that the whole effort expended to win the War of Independence was being lost by the inefficiency of governance under the Articles of Confederation, an assembly of state delegates to revise the Articles finally convened in Philadelphia in May of 1789. By September 17, 1789 they had the U.S. Constitution which few had expected, neither the delegates nor the anti-federalists. But there is was. When you study the constitutional convention again, you will find that the idea of the Constitution as a whole is much bigger than the sum of the individual ideas contributed by the delegates in its creation.
"... and we are seeing and being smited by the costs of the splendor of the "big lie", here and now."
Franklin knew that there were always people who just took things for granted. When something went array, they would turn around and blame others. At the signing the Constitution, when she asked by Mrs. Pollack as to what kind of government was instituted, Franklin said, "a Republic, Madam, if you can keep it."
Of course, you had nothing to do with losing the American Republic. That occurred a hundred years ago. But, just because our forebears didn't understand human nature and let the Repulic be stolen from them, you now condemn the whole initial effort. How quaint.
But, don't get me wrong. I am all for you pushing your point of view. It's part of what the Constitution protects.
Posted by Bischoff on 03/22/12 04:03 PM
"Don't like it? Too bad, we have armies of unproductive entitled just waiting for us to turn off the spigot of "manna from heaven" to run amok, seeking "fairness" from the "evil and greedy" productive until "you, the productive" BEG us to "take control" and impose servitude, because that is "better" than "war of all, against all", no security or survival for any (except us, in our bunkers, which you have so generously provided)."
Well, the answer it to give them access to land through the land value tax. This gives your armies of unproductive entitled the equal opportunity to fully benefit from their work. If then they still want to riot, let the Sheriff or the PD deal with them.
I don't see where your prescription does anything to give an equal opportunity to what you call "armies of unproductive entitled". They feel "entitled" because of basic human nature to reach out and pluck fruit to sustain themselves. "Work" is antithetical to humans. It must be learned and practiced, if you want to live "free" in civilized society.
... but, how are you going to do that without equal access to "land"... ???
Only a land value tax provides that equal access, yet as I recall you are utterly opposed to it. So what's left... ??? Nothing but the old tribal approach to securing survival. You're not a Taliban, Bill... .are you... ???
Posted by rossbcan on 03/22/12 03:50 PM
IMHO, "the understanding of human nature and natural law as exhibited by Benjamin Franklin and Thomas Jefferson." and, the US Constition was predicated on the understanding of human nature I have clarified, quantified in measurable terms and present in my work. I studied these fellas and pondered their and many others works.
I see no contradictions with the original "Declaration of Independence". I see great flaws in how this was claimed to be achieved by the US Constitution, and we are seeing and being smited by the costs of the splendor of the "big lie", here and now.
Posted by johnblenkins on 03/22/12 03:30 PM
My point exactly,Silver price manipulation on a grand scale.
In the last year I have managed to put away 2200 oz
having paid anything from 30p a gram to 70p a gram.
(scrap .925 silver price I can get tonight 54p a gram)
So I must thank Blythe Masters @JPM and friends,
for these super buying oppotunates.
No intention of selling any time soon.
The more phyz taken out of the market the harder the fraud will be
The blowback when it comes will see silver fly.
WHY would anyone want to crush the silver price as they do.
They have too it is the achiles heel of JPM et al,
working hard for the CBs so we don't discover the real price
in fiat- ponzi paper.
Posted by Bischoff on 03/22/12 03:01 PM
" I contend that it does not matter whether it can be mass produced or not, the quantity of gold is of no consequence, for quantity is not what determines value."
I can see where you can legitimately make such deduction. However, my point is that the amount of work to produce a specific quantity of gold cannot be shortcut by other processes. Since the amount of work required to produce a certain amount of gold remains and has remained constant over time, gold makes an ideal standard by which to measure work.
It is that aspect which I was pointing out in Item #1, and not the quantity aspect you read into it.
"I'm stating that constant marginal utility is given by an infinite bid."
That is not quite correct. Re declining marginal utility, we are not talking about a bit here. You cannot look at it from the point of alternative utility, as it would be with a bid. Instead, you have to look at it from the point of utility itself. IOW, which commodity would you refuse last, if you could have it for nothing.
For Gold, the marginal utility declines slower, if at all, than for any other commodity on earth. IOW, the saturation point for gold is so far off as to be infinite (almost).
Posted by Bischoff on 03/22/12 02:45 PM
Let me try...
When you say, "... still accept this particular form of money... ", you intimate that there is another form of money other than gold. There is not.
Gold has an "objective" value, because untold numbers of people across the world, both past and present, recognize gold as the one commodity on earth which best preserves value (work). It is for that fact that the value of gold is "objective".
You are looking at money as having a "subjective" value, but such view violates the definition of "Money".
Therefore, unless the "objective" value of gold changes, only gold is the ultimate store of value as decided millennia ago. Neither you, nor any government can change it.
Posted by Bischoff on 03/22/12 02:31 PM
Yes, we differ indeed. As you must know by now, I do not agree with your understanding of human nature and natural law. I truly hope you can sell your view.
I in turn am quite content to follow the understanding of human nature and natural law as exhibited by Benjamin Franklin and Thomas Jefferson. Their ideas were largely reflected in the U.S. Constitution thanks to mostly to Roger Sherman.
Posted by Bischoff on 03/22/12 01:56 PM
"When a business today provides credit via accounts receivable, isn't that similar to a RB ?"
No, it is not. Real Bills are not credit. Real Bills are negotiable instruments which can be discounted by the drawer for cash the minute they are accepted by signature of the drawee. For details see "The Wealth of Nations" by Adam Smith, 1776.
While RBs finance production, don't forget that it includes labor input. RBD currency is as important to the worker, as it is to the producer. The RBD contains within it a "wage fund". RBD is an all around currency. It favors no one over anyone else.
"Eliminate the 16th Amendment (I also agree) - what is your suggested tax system as an alternative (consumption tax ? )."
The U.S. Constitution prohibits a tax on labor and wealth. The federal government was authorized to collect duties and fees. Any other money had to come from the states. The only way states can raise money without violating the U.S. Constitution is to collect a rent for the use of land.
For that reason, the constitutions of all 50 states (except California which broke the covenant with Proposition 13) are modeled after the cosnstitutions of the first 13 states which in turn were modeled after the 1639 Constitution of Connecticut.
That constitution was based on ancient Anglo-Saxon principles of governance and methods of controlling the use of land. All states have a county (parish) system with assessors to value land under fee simple title. Local jurisdictions use these valuations as a basis to calculate a taxes to defer costs at all levels of government.
NO income tax, NO consumption tax, NO tax whatsoever... . except rent.
Posted by rossbcan on 03/22/12 01:33 PM
"... political economy organized... "
Therein we differ. I am for, self, ad-hoc, peaceful, mutually agreed contractural organization. I know it is a tough pill to swallow, but, the US Constutution, although purpoted to serve this purpose "by and for the people" has been usurped to mean (judicial misinterpretation) "our ancestors placed us in servitude" and, "we, the arbitrary decree'ers" using force of law and resources stolen from "you, the productive" consider it "neccessary" and INTEND to "force it to be so".
Don't like it? Too bad, we have armies of unproductive entitled just waiting for us to turn off the spigot of "manna from heaven" to run amok, seeking "fairness" from the "evil and greedy" productive until "you, the productive" BEG us to "take control" and impose servitude, because that is "better" than "war of all, against all", no security or survival for any (except us, in our bunkers, which you have so generously provided).
Posted by obsvr_1 on 03/22/12 01:23 PM
I like the idea of RBD, and remember discussion in this regard in the past.
It has been a while since I looked into this, I seem to recall that the Real Bills work well within the supply chain and for business to business transactions, but was less efficient for those outside of the value chain. The commercial banks could provide liquidity for a RB, but that puts a middle man in the process for the exchange.
When a business today provides credit via accounts receivable, isn't that similar to a RB ?
Also see Click to view link
interested in your feedback to this line of thought.
Eliminate the 16th Amendment (I also agree) - what is your suggested tax system as an alternative (consumption tax ? ).
Posted by Bischoff on 03/22/12 01:05 PM
"Instead of dismissing an idea and as others on the blog have done by summarily rejecting ideas because it is not a gold standard or ultimate libertarian world, I wanted to engage in a discussion of the "baby step" in comparing the existing world of debt-based money vs. Restore Seinoriage."
If I was a little sharp in responding to you, I apologize. You seems to being honestly search for a solution. I can see where the idea of "debt-free" currency appeals to you, but it has severe limitations.
The "greenback", first issued in 1864, was a "debt-free" currency. It proved extremely successful and was continuously issued for a hundred years. In essence, it was a Bill of Credit issued by the USDT.
I would advocate the reissue of the "greenback" as means to pay federal government employees, provided the 16th Amendment is repealed. That way, the consumer on a daily basis can vote on the size of the federal government. As long as the "greenback" is accepted at par with redeemable currency, people indicate that they are content with federal government services. If it falls below par, the federal government has to shrink the work force. This will almost come automatically, because when federal employees loose purchasing power with their greenback currency earnings, they'll quickly enough find a job in the private sector which pays with redeemable currency.
The only problem with greenbacks is that they are unsuitable as savings. While they can be used for consumption buying, no investment trust will except any large amount of them (too large to be sold at par for gold) to invest for a client.
Therefore, unless the Congress is willing, as it has in the past, to throw the greenback open for redemption with gold during set periods of time, the greenback will not work either.
The only currency system that works is the system that creates currency under the Real Bills Doctrine of Adam Smith. Such currency expires upon maturity of the Real Bills.
In modern day parlance, bankers call RBD "self liquidation loans", but please don't expect them to know what that means, nor that they ever heard of RBD or Adam Smith.
Posted by Bischoff on 03/22/12 12:39 PM
That's not a baby step. That's organizing an entirely new political economy. I am happy to stick to the political economy organized with the original U.S. Constitution.
The first baby step to take... ??? Remove the "legal tender" protection given to the FRN in the Coinage Act of 1982. That's a bay step worth taking.
Posted by rossbcan on 03/22/12 12:23 PM
"Baby steps... .??? Why don't you name the first baby step... ???"
Personally and collectively insist (by self-defensive ACTION) on the REAL social contract:
Click to view link