The Private Supply of Money | George A. Selgin

[tepstolog]

Only the FDR Glass-Steagall principle will separate commercial from speculative banking, thus freeing the nation from obligations to Wall St. and the City of London, and re-establishing a credit system for rebuilding the nation.

H.R. 1489, Return to Prudent Banking Act of 2011, is before the House of Representatives, which aims to revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so called 'Glass-Steagall Act

[4thstuning]

@tepstolog This is just more government malfeasance. Our recession/depression is 100% govt caused - fed lowering interest rates, regulations lowering reserve requirements for housing, govt pushing home ownership w/o regard for abilities to pay, implicit guarantees by Fannie & Freddie, FDIC, and on and on. Glass-Steagall provided no protections and the Gramm-Leach-Bliley deregulation actually helped stabilize the situation by allowing JPMorgan to buy Bear-Stearns & BOA to buy Merrill Lynch.

[CaptainLazerus]

It seems that possibly Gift Cards will be the new token!

[NicosMind]

The Economics of Inflation by Costantino Bresciani-Turroni, explains the hyperinflation in Germany between 1913-23 very well and in it the reverse of Gresham's Law happened where good money drove out bad as people avoided the German mark and used foreign currencies

[robzrob]

Fascinating.

[PHSDrmStaff3]

Dr. Selgin is a great professor. I had the honor to take his courses while he was at West Virginia University. He is a very knowledgable economist and a great person in general. Excellent presentation and excellent book! Thank you George!

[PHSDrmStaff3]

Dr. Selgin is a great professor. I had the honor to take his courses while he was at West Virginia University. He is a very knowledgable economist and a great person in general. Excellent presentation and excellent book! Thank you George!

[RunLiberty]

Could private money be backed by-

Bananas

Oil

Services (medical, auto repair, etc)

Protection with Guns, Weapons?

If the nature of humans is toward self-preservation, greed isn't a revolution in morality also neccessary?

[Xasew]

I thought I already commented here, but it seems not. I just watched this for the 2nd time, and it is still awesome. Very informative and intriguing.

[hugolp]

This is one of the best mises media video ever.

[takokurdadze1]

Dr. Selgin is Great!

[DarthKazi]

Coinage of a precious metal or even pure copper, should be based on weight, not a political abstract. If the government issued copper, silver and gold coin in exact quantities to market demand and interest-rate performance and the system was solely based on weight value, maybe a government issue system could work over time.

[DarthKazi]

I'll expand on my statement with an example: Silver was once held at a parity with gold with a ratio of 15/1. For every ounce of gold, you could get 15 ounces of silver, regardless of what the global trade values stood. This caused horrible distortions and if the exchange rate under or over-values the metal, coins will either inflate or be hoarded and uncirculated.

[thomasst2]

@DarthKazi Gresham's Law?

[DarthKazi]

Government needs to get out of the money-creation business all together. This is one point of the Constitution I think it outmoded. The government just cannot "coin money and regulate it's value" in such a complex society and market. They cannot know how much and they cannot know the value anymore. Period.

Times and realities have changed so much since 1789.

[commentarytoday]

Thanks to MisesMedia for this fine video. A superb lecture on private coinage. Excellent ! Ausgezeichnet ! Good thing that the government is not running the internet.

[marxbitesall]

@commentarytoday

Don't think for a moment that Uncle Scam isn't exploiting it to maximum advantage.

[Piscivorus]

This video was supposed to show how private currencies can be practical but, instead, it showed every reason why it can't. Even in old cottage markets it was hard to implement, today it would be impossible. Workers only want what retailers demand and businesses only want what governments demand etc. Given multiple private currencies, it's inevitable that only one will be accepted and the producer of that currency will then gain a defacto monopoly with unlimited wealth and power.

[tonidepoli]

Nonsense. Ol' Pis doesn't pay much attention. The video says that businesses wanted the private coins, and rejected the government ones. And if government monopoly's inevitable, why did the British government have to outlaw private coins?

[Piscivorus]

Businesses did want government coins. They only resorted to producing private coins when they couldn't get government coins. That was the government's fault. Eventually they had too many different kinds of private coins and too much counterfeiting. It's impossible to sustain an economy with that. But the government didn't outlaw private coin, it simply granted a monopoly to the Bank of England.

[tonidepoli]

Wrong. The Bank of England didn't issue coins after 1816; and private coins were outlawed before then by the following acts: 52 Geo. III, c. 157 (twice deferred) and 57 Geo. III c. 46. Your claims about counterfeiting are also wrong--it was far worse for government coins. You confuse your preconceptions with facts.

[Piscivorus]

Ok but, before 1816, when private coins were outlawed, the Bank of England DID issue coins- as I said, it had a private monopoly.

[tonidepoli]

Wrong yet again! Many firms were issuing their own distinct coins between 1811 and 1816; collectively they supplied many more coins than the Bank of England. At no point did the Bank of England possess a monopoly of coins (although the Royal Mint did both before 1787 and after 1817).

[StrafingMoose]

Anything the governement does, the "private sector" could do it. Simply because "governement" and "private sector" do not exist, you only have a bunch of people doing things in concrete reality.

[Piscivorus]

25:00 the competitive private coin industry had 20 different copper coin mints producing 600 tons of specialty copper coins for hundreds of issuers - talk about inflation! That was about half as much coin as the royal mint has produced in the last half century. Can you imagine trying to price goods in a grocery store for hundreds of different coins? Coupons would be huge because the fine print would be so long. And what if a store won't accept the coins you happen to have? It'd be nuts.

[tonidepoli]

An addition to the stock of coins doesn't cause inflation if it merely makes up for what had been a shortage of coins. And far from being more confusing than official coins private ones commanded a 100% premium over them! Finally, the all the coins were based on the same standard units, and tended to trade at par, at least locally. This is all in Selgin's book, by the way. Instead of trying to "guess" the history, you should read it!

[Piscivorus]

It wasn't merely an addition, it was a flood. And how do you figure hundreds of different private coins would somehow be less confusing than a single official coin? That makes no sense. If that's the sort of logic Selgin uses in his book, reading it would be as much of a waste of time as arguing with his dingbat fans. I'm not guessing history, I'm just using common sense. It's fun, you should try it some time.

[tonidepoli]

You can't "do" history with "common sense" alone. You need to know the facts. For instance, you need to know that the Royal Mint put the percentage of counterfeit regal copper coins from unknown sources ca. 1787 at over 90% of the total, and that there were actually more varieties of fake regal stuff than of commercial coins. So, yes, merchants could actually save themselves trouble by refusing "official" coins and dealing only with commercial ones--and that's exactly what many did.

[Piscivorus]

Eighteenth century England was a special case and cannot be compared to the present global economy. Even if commercial cash were legalized today, nobody would use it because digital money is more convenient and the widespread availability of cheap credit ensures that digital money will never be in short supply. Perhaps, when world oil production falls to 50% of it's historical peak and electric power becomes so expensive that it forces the world back into local cash economies, it can happen.

[TiredOldFart]

If the coins are pure precious metals, it won't matter who minted them.

[Piscivorus]

Ok, let's say you make gold dollars and I make aluminum dollars. Would they have the same value or not?

[DarthKazi]

@Piscivorus Depends on the value of gold vs. aluminum in the market. As of now, and partly based on recycled aluminum driving the price of it down, aluminium money would be almost worthless in a gold-backed economy.

[brizzlie]

I think this could be the mid-term future of money. We should all have our own community/backyard coin presses, pressing different metals to specific weights, and use them for barter.

[NicosMind]

There are some regions in the UK that still have local currencies. I can imagine with the crash in the pound recently theyve been well valued. I remembered seeing on tv one time on a money program on tv. Doing a quick search ive found 2 places Berkshire and Devon. However theyre not coins im just realising. Still better than stirling cut not good enough.

[chitch1776]

Excellent presentation.