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That is old. What is the story now?
If the idea is Free currency markets, then, any currency is 'legal' (so long as criminals are not injuring innocent victims by fraud or violence with their version of 'legal' currency) and if any currency is legal, then, gold will compete against, say, energy currency and even currencies like the Euro or the Yuan right here in the good ole' U.S.A.
Gold is fine, or course, the thing about it is; will it be able to compete in a truely free (free from fraud and violence) market (market anarchism) if a more accurate and less costly currency isn't blocked from the competition?
Many well researched and proven competitive forms of currency have rendered gold to be less accurate and more costly in U.S. and world history.
One example is what Ben Franklin described to the British before the Revolutionary War. Another is 'labor notes' invented by Josiah Warren before the Civil War. There are also examples of stamp script used in Germany before WWII.
Lysander Spooner also described A New System of Paper Currency backed by land ownership. The point here is to point out that the Government that governs least governs best (besides the 'government' that does, in fact, manage to keep just ahead of the criminals to lessen the criminal's injuries to innocents) and if Ron Paul is to 'out-law' outlawing honest competition in money markets, then, why push GOLD down the people's throats?
I have a theory that suggests a need to shackle government spending with the GOLD standard; however - why impose that crippling demand on those who would rather not be hamstrung by it?
Does Ron Paul suggest that everyone will abuse their freedom to create and maintain free market currency and become criminal frauds and extortion racketeers just like the Fed is now (without his 'help')?
In this one detail – the critical importance of the gold coinage – I believe lies the key to establishing a new gold standard.
I am reading from the link at the top of this page while I comment. So far the suggested plan to inject the U.S. with a Gold Standard does not 'bar' competition in currency, rather, the suggestion is to employ (with tax revenue, involuntary tax as it currently exists) purchasing power to create gold coins and then use those gold coins as 'legal' tender. I believe that this can also work but only if there is no 'legal' incentive to trade gold for imports where (Gresham's law) 'our' currency leaves the country and 'we' can no longer pay taxes with 'legal' tender (gold) because 'we' no longer have any gold (we now have the imported stuff).
If I am not mistaken the problem of gold becoming scarce (and therefore costing more to get) was engineered by people before, during, and after the "Revolutionary War (1776)" as 'legal" paper currency was printed as payments while only 'gold' was accepted as tax payments. No foreign trader wanted the paper in exchange for imports and therefore the gold left 'the people' inspiring the creation of a 'black market' currency called whiskey. That black market currency (whiskey) was soon 'taxed' or 'out-lawed' (it was a competitive currency) where the penalty for failing to pay the 'whiskey tax' (with gold) was jail time (no more ability to earn purchasing power), fines (payable in gold), and forfeiture (loss of the means to earn), which, if you can imagine was the very reason for fighting the so called "revolutionary war" (out with the old bosses and in with the new bosses), so, Shays's Rebellion before "The Constitution" and The Whiskey Rebellion after The Constitution, where, people rebelled against the injustice of taxing people into slavery with a currency pyramid scheme. Paper on one hand and Gold on the other hand is the pyramid scheme and the victims are the tax payers who have to pay taxes with Gold and are paid with paper. The government acts as the check valve between criminals and victims. The government says: You can pay the people with paper (corporations can); however - all taxes must be paid with gold.
I will read on with Ron Paul’s suggestion and I will look for that check valve. What must be in place is a protection for corporations where the people running those corporations can issue their own paper currency for payments and non-corporations are penalized for doing the same thing. See?
If Joe Blow wants to compete in the currency business, then, the government makes that too costly for Joe to compete with license fees (including required license test studies and costs) while a 'company' can hire one agent to pay these 'fees'. The idea is to 'protect' people from the 'counterfeiters' (Joe wanting to print his own currency) whereas, in reality, if Joe prints too much of his paper I.O.U.s, then, no one will want them. On the other hand; if Joe is allowed to print at his own cost (his own cost in reputation) then Joe can get as much 'investment' power (purchasing power) as he is able to freely. If his 'currency' is good, then, he will be able to compete based upon his own merit - not as a 'government' sponsored 'privilege'.
In short the idea is to find out if anyone is out-lawed in the currency business according to the Ron Paul suggestion.
What we must first do is get the coinage into circulation, and then build the political base to lock the government's fiscal folly with golden handcuffs.
I see exactly what I suspected. Ron Paul does envision the shackling of government with a gold standard and I agree with this so long as it does not out-law competition in money markets outside of the 'government' business. The thing about Ron Paul, one must admit, is that he is in with the theives so he knows how to fix them. What about us Joe Blows?
They don't need to agree or even understand the fine points of monetary theory to own gold coins, trade gold coins, or use gold coins to satisfy part of their marginal-utility demand for cash balances.
This is speaking to me. I do not understand those 'theories' since I do understand the facts about costs. The cost principle is a fact - not a theory. I can go on and on about how the Gold Standard (with 'marginal-utility') is very poor when comparing that 'theory' to an energy currency fact, where, the greater the supply of energy currency the greater will be the purchasing power of that currency because the costs of production are reduced by that 'over-supply'. This is counter to the Carl Menger inspired Austrian scarce economic 'theory'. I don't think that Mises was infected with that bug. Anyway; there are more ways to skin a cat than energy currency or a Gold Standard and that is why (as Mises points out) FREE MONEY MARKETS are best (so long as 'free' doesn't mean free to injure innocents by fraud or violence).
I would love to see a purely private, free-market monetary system with any honest manufacturer able to produce coins, as Americans saw in California from 1849 to 1864. There must certainly be no restrictions on the private production of coins, but I believe that getting the US Mint further into the act, producing a gold coinage with some of the mystique of the government, will be useful in the further political stages of monetary reform. Honest money, after all, is a political objective; it is fitting that people should demand honesty from their government, as well as an economic policy that permits individuals to compete honestly. An official coinage that reflects honest bullion weights is a powerful symbol of the gold standard we support.
That is fine so long as Ron Paul doesn't come down with some punishment when an honest manufacturer produced paper currency to be used as paper currency between anyone willing an voluntary partner based upon honest and honorable exchange agreements. If, for example, Ron Pauls suggestion includes a law that punishes anyone manufacturing a 'bill of credit' because (according to his 'theory') he thinks a 'bill of credit' is 'inflationary', the, that is the confession on his part that he is a 'monetary crank' (to use the Rothbardian ad hominem) and a despot. If person A wants to print an I.O.U. and person B accepts it based upon the documented promise written on the I.O.U., then, it isn't any of Ron Paul's damn business.
See?
If Ron Paul wants to shackle government with the restraints of a Gold Standard, then, by all means do so - please. If Ron Paul wants to shackle everyone else with the same 'penalties' for failing to abide by his version of economic theory, then, he is can do so by out-lawing the competition based upon his 'theory' instead of allowing all competition to compete (so long a no one is frauded or violently injured against their knowledge or against their will) in a FREE MONEY MARKET.
If, for example, a law out-laws 'bills of credit', then, there is an obvious fear of the competition and if the justification for out-lawing 'bills of credit' is based upon a 'theory' that suggests that voluntary 'bills of credit' between free traders is 'inflationary' according to the 'theory', then, that is 'future crime' being outlawed by someone who will abuse the power of government to impose a currency monopoly and out- law the competition. It will be the same damn thing under a new false front.
Second, as Mises understood, the Federal Reserve and existing banks have to be kept separate from the remonetization of gold until the progress of popular support is broad and deep enough that special interest lobbying will not pervert the system. By avoiding any use of a dollar denomination on the coins, the Federal Reserve System is automatically kept out of the picture during this developmental period. The dollar denomination is today a monopoly trademark for the Federal Reserve System.
Warren (Equitable Commerce) and Andrews (The Science of Society) illustrate the need to have a standard measurement too. Not having a standard measurement is like a carpenter or machinist measuring stock with an erasable stick or a dial caliper with a blank face. The carpenter makes a mark on the stick and then uses the stick to cut a new piece at the right length. That works for the carpenter. What happens when the carpenter gives the stick to a helper? The helper says things like: "Is this the outside of your mark or the inside of your mark?" The carpenter says: "I don't remember; most of the time I use the inside of the mark."
See?
If currency isn't accurate, then, it costs more. If currency doesn't have a 'scale' that is universal (good for everyone), then, there is a whole lot of room for someone to bend the margins and get more for less because the measurement is ambiguous. That is why frauds want 'fiat' currency. That is not a universal attack on any paper currency. Paper currency can be useful, certainly, and it can be standardized based upon THE STANDARD. Gold can be the standard. I prefer to make the standard a NEWTON. That is my idea concerning Energy currency. How long will it take for anyone to adopt my idea? How much time is left before the neo-cons destroy the Earth?
The choice for advocates of a gold-coin monetary system, therefore, is straightforward: either we move ahead with a program for US gold coins denominated by weight, with no face value in terms of dollars – thereby starting the transition period immediately – or we sit on our hands, perhaps for decades, debating the fine points of banking theory, until the paper money system collapses around us. Even then, it is not obvious that the collapse of the paper money system would bring about the political pressure necessary to restore a gold standard. We might end up with controls on wages, prices, credit, and exchange controls instead of a gold-coin standard.
We are on the same page here - again. It makes no sense to divide actions against the most horrible criminals who have infected the human species since time began, so, find an agreeable defensive plan and go with it. So far I have not seen the killer where Ron Paul out-laws the competition in Money Markets, rather, his 'nationalism' intends to strengthen this thing called The U.S.A. in competition with other 'countries' by creating a standard by which economic trade can measure economic trade. A voluntary standard is preferred over an enforced one; however - I'm not in a position of power to do either and I know, for a fact, that a standard of measure is economically much more powerful than what happens without one. The power of falsehood is unleashed without a standard of economic measure and human beings really need to know this fact sooner rather than too late.
So long as the conversion agency performed its role, it would also be impossible for the Federal Reserve System to produce a monetary inflation because the conversion agency, which would be completely separate from the government's banking activities, would be engaged in the process of absorbing excess dollars from circulation, in exchange for the troy-ounce coins that it issues. If the Federal Reserve made the opposite mistake, as it has often done in the past, of overly restricting the money supply, the market could always sell coins to the conversion agency to obtain any dollars demanded. A precise balance would be achieved between the general public's demand for money in the form of coin and its demand in the form of bank notes or deposit accounts with banks by the existence of the conversion agency as something separate from the Federal Reserve.
Ron Paul talks about Gresham's Law and please don't get too confused about that because it doesn't need to be so confusing. If you print your own money (think about a 'time card' where you punch in and out at work) and your fellow employee prints his own money (he punches the same clock) and both of you are turning in your money to an employer, then, which one is better than the other?
Think about that awhile. You punch the time clock and your fellow employee punches the time clock. You both turn in a card (money) to an employer.
Which money does your employer accept and which does your employer reject (supposing, of course, that the employer can only take one and not two time cards)?
Well...this is too easy really. The employer will take the one he wants to keep and the employer will reject the one he doesn't want no matter what is written on the card. That is the point.
That is precisely the point and don't let anyone else tell you different - please. The confusion of Gresham's Law is confusing on purpose so that someone has the power to reject what he doesn't want and accept what he does want based upon an arbitrary decision on his part. The fix is accurate measuring and reductions of costs.
Go back to the time cards and see this clearly.
What happens if you produce twice as much in the same amount of time as your co-worker and you get back to the same situation where you and your fellow employee are turning in the same time card (currency).
You also know that your fellow employee has someone else punch is time clock in before he arrives at work late. You also know that the fellow-employee spent half his day under the employers desk if you know what I mean.
Your time card is good. Your fellow employee's time card is bad.
Now tell me how Gresham's Law works?
You don't have to be a rocket scientist to figure it out. The benefit of a standard measure is a time clock that is honest and universal to all. On the time card, with good, accurate, and cost-less currency would be all the information required for accurate exchanges - not just time.
One more point may help brighten the idea bulb over the head. If things move along as the are and human labor becomes more and more valuable because fewer and fewer people MUST work, then, the tables will turn and know this or trust this now just for your own sake and only to peek ahead and see the possibilities.
Take the same time clock scenario above and imagine 5 employers knocking on your door looking for someone, anyone, to do some work. The same 5 employers are knocking on your fellow workers door (the one under the desk).
You decline to work today because you want to see what happens when your fellow worker spends some time at his new job. Here is the thing:
When the work isn't done by your fellow worker, then, the employers return to your door. You earn your living because you are the genuine article - you are not fake.
Gresham's law is this:
Fake shit is forced and sold (false advertising) into a state of value that does not exist without the lies and without the violence. Strip away the lies and the violence and there isn't any Gresham's law because people are armed with the knowledge of what is genuine and what is NOT.
See?
The fact that the troy ounce of gold is well defined and the paper dollar has no fixed referent at all should be made the focus of continued education and debate, just as we are now doing.
That is a reference to the Federal Reserve paper dollar (inaccurate money).
The task at hand, therefore, is to remove every roadblock to the realization of the will of the majority. The sentiment for gold must be mobilized. The question is no longer "Why do we need a gold standard?" but "How do we get it enacted?" To restore the gold standard to its central role in our system of constitutional government, we must lead a second kind of American revolution, a popular movement for honest money.
Again - that was an old article and now is now. There isn't any mention of road blocking the creation of paper currency by anyone if someone wants to give it a try. The check valve of gold on the government would then cause the government to spend only as much as it receives like cutting up its credit card. I think a big problem with that plan is the number of people in government who depend upon that credit card to live at the expense of their victims - for nothing in return. People who have grown accustomed as parasites will fight against that plan. People really aren’t stupid.
People who earn their living will see the value in it and the question remains to be answered as to their level of support for it.
By no means can my support for this plan be synonymous with support for any punishment perpetrated against people creating and maintaining a more accurate and less costly currency voluntarily traded between welcome individuals where no innocent people are inured for profit.
That last statement does not apply to the parasitic criminals who will certainly see FREE MONEY MARKETS as an injury to their current flow of purchasing power from those who earn it.
Last edited on Sun Jan 20th, 2008 11:55 am by Joe Kelley