Web Of Debt - Ellen Brown Interview With Simon Dixon Part 2 / 3

[joepeeler34]

The Greenback lost over 70% of its purchasing power in a few years' time. Same with debt-free Continental currency. Same with every other fiat paper currency in history.

Don't get me wrong, the Federal Reserve system needs to go, but we had better be careful what we replace it with. I advocate, as Ron Paul, that we legalize competition. I suspect that in a market gold and silver would win out, but we would see. There might be 4 or 5 competing currencies in the end.

End govt. monopoly.

[rayme4raw]

@joepeeler34 You're right, once people lose "faith" in fiat currencies, they're going to want money that cannot be manipulated. If they try to introduce a new currency that is partially backed by gold, it'll probably fail because people will see right through it once they discover any manipulation. I think that the first couple of currencies will fail after the dollar falls before we're back to using gold and silver.

[bankingreform]

@joepeeler34 Gold is only necessary if you still want banks to create money or government to create money as a way to regulate money creation, but neither of them can be responsible for money creation due to conflicting incentives.

Gold is just another way of patching up a system that will never work.

Electronic fiat money is very convenient if independently created for inflation deflation targeting only.

Gold is not banking reform, it is regulation of a system that will collapse.

Simon

[joepeeler34]

@bankingreform I don't want a gold standard. I want a complete separation of govt. and money. If banks were required to have 100% specie reserves by law then there would not be a problem.

I think competition and choice are the best disinfectants. Private mintage was common before the mid-1860's when the govt. consolodiated its money monopoly. The history of private mintage in Birmingham, England and in the states with Templeton Reid and the Bechtels is worth reading up on.

[whahas]

@joepeeler34 You are contradicting yourself. How can you have a complete separation of government & money if banks are required to have 100% reserves by LAW? You do realize a government has to enforce that, right? Without that law, banks would reduce their reserves anytime they get the chance, because it increases their profits with huge margins.

Still, you might be interested in the system proposed in Money as Debt III, which includes competing 'moneys'.

[joepeeler34]

@whahas No I am not. What I mean by separation is the government not issuing currency. The govt. has a legitimate role in that it should punish fraud. The govt. can attest to the weight and measure of coins issued by private minters. In this role the government has a negative function.

I've seen all of Bill Still's videos and the one you cite. I've read a great deal about monetary history and economics. You have seen maybe a few videos, right? Maybe I understand it a little better than you.

[whahas]

@joepeeler34 I have seen so many, that I find it disappointing that not all monetary reformers are working together, because If I understand correctly, they are all against a national debt.

That would be a great start (of further monetary reform).

What is your opinion about the proposals to reject banking and government from money creation?

How do you plan on keeping competition?

It could very well be that one of the currencies becomes overused.

How do they enter the money supply?

[whahas]

@joepeeler34 Oh, I almost forget. Since you seem to be 'in the know', what should money be, a medium (of exchange) and a good or just a facilitator of trade (a medium)?

Does it have to have intrinsic value?

When is someone allowed to make currency (in your proposal)?

In which currency do people pay taxes if there isn't legal tender and more than one currency?

Are the issuers (of currency) in your proposed system linked to actual production?

[joepeeler34]

@whahas I don't pretend to know what the market will choose for monies with certainty. I suspect that gold and silver will win out, but competition and choice will sort it out. Money is a product, it's just a commodity with monetary functions.

Money has to be value for non-monetary uses, be finite, have high unit value per measure of weight, non-corrosive, and other attibutes.

As for taxes, people used to pay in weights of gold and silver. Doesn't matter what minter issued them.

[whahas]

@joepeeler34 Shall we agree to disagree? In my opinion, money is just an idea, a social innovation if you will. It's the basis for our economy and should function merely as debit / credit.

Yes, indeed. That's just my idea about an idea...

Money should be neutral and stable.

[joepeeler34]

@whahas Money should be storehouse of value, unit of account, and medium of exchange. It's true that in its function as unit of account that it is a debit/credit, but that isnt' money's primary function. Money's primary attribute is as a medium of exchange. All of its other functions derive from that.

[whahas]

@joepeeler34 I would like to see money function merely as an infrastructure. A method to get from A to B through the use of M. It should just be there when we need it. Only our current model doesn't allow us this flexibility, because everything is noted in Money.

It's like stating the importance of the internet merely based on it's connection speed.

Money is also a 'single uniform commodity', I'd like to see that changed.

Money should be created as real value is made: linked to production.

[joepeeler34]

@whahas I'm not sure what you mean by "linked to prodcution." You mean the minter of the coin being the distributor? If you want to understant how private mintage gets into the money supply pick up a book called "Good Money." Or look up Templeton Reid and Christopher Bechtel. They were brought silver and gold and for a fee would fashion the bullion into coins that were stamped for their weight and purity.

[whahas]

@joepeeler34 No, I was referring to the system proposed in Money as Debt III. A system where a producer can be an Issuer and use is own credit-money as transaction money for his own operations. In that way the economy is flooded with lots of money linked to production as the value of that credit-money is dependent on the ratio demand/production. It has a in-build correcting system.

It's purely digital, but debt-free. Still, I wonder if you would consider it?

This is an oversimplification btw.

[joepeeler34]

Further, the competition is what kept the minters honest. Why do you get competition, choice, and quality with coffee, tea, toothpaste, etc.? It's the competition.

As far as "overusage," what stops people from "overusing" (not sure how we can objectively define that) coffee. The pricing structure is what relays scarcity, demand, etc. Money has a price. If supply dwindles, price or purchasing power of money increases. The process self-corrects as with production of eggs or bacon.

[dogbarker1981]

@joepeeler34 this is because it was counterfeited by the British. Colonial Script was destroyed quite the opposite way but you never hear gold bugs talk about Colonial Script only the Continental. The Currency Act of 1764 and Stamp Act of 1765 forced the colonies on a gold standard during the period of Colonial Script. The colonies had little to no gold to pay their taxes in gold. This proves how a gold standard alone could cause tyranny to a nation when the quantity is controlled by a few.

[joepeeler34]

@dogbarker1981 The paper money issuer is engaged in counterfeiting if its understood.

The Colonists were rapidly depreciated their currencies, so creditors--including British merchants--were being repayed with cheaper money. Curr. Act of 1764 was to address this. Debasement is a type of default and fraudulent.

Stamp Act was more about taxation without representation.

Paper money is the tool of tyrants. This is why govt.'s seek to abandon the constraints of gold.

[dogbarker1981]

@joepeeler34 Paper used to be the tool of the people, by the people, and for the people. It is legislation bankers ram through government that causes paper to be the tool of tyrants. Gold in the hands of tyrants makes gold a tool for tyrants...

[joepeeler34]

@dogbarker1981 Paper has always been political money. It is always debased--especially when it is delinked from gold and silver or some other commodity. When currency costs nothing to produce, the govt. subject is reliant on the monopoly issuer not issuing too much of it. Good luck when that when the government is incentivized to do just that.

1) The govt. can monetize its debts 2) The govt. can create inflation bubbles before elections and resort to debasement to hide lower real wages.

[joepeeler34]

@dogbarker1981 I challenge any of you on this board to name one fiat paper currency from colonial times or since the founding of the Republic that didn't go to zero, or came close to losing most of its value before a return to precious metal money.

Read up on colony issued paper money. There were numerous cases of hyperinflation. Same with Continental. Same with Confederal dollar. Greenback lost over 70% of its purchasing power in a few years.

No fiat paper currency lasts for long.

[dogbarker1981]

@joepeeler34 Colonial and the Greenback were destroyed due to lack of supply. Hence the laws that were passed that caused them to depreciate in supply over time. Again if the quantity is controlled there wouldn't be a problem. Fiat controlled tally sticks lasted for 700+ years.

[joepeeler34]

@dogbarker1981 Exact opposite with Greenback and Continental. The collapsed or were severely debased because the government resorted to finance by the printing press.

A smaller supply of currency means greater purchasing power all else being equal. For every new unit created all existing units are diminished.

I remember G. Washington remarking near the end of Rev. War that "it takes a wagon-load of money to purchase a wagon-load of provisions."

It's the story of paper money.

[dogbarker1981]

@joepeeler34 I am talking about the Colonial Script not the Continental....Research the Extraction Act of 1866 for the Greenbacks. The supply of Greenbacks then fell from 1.8 billion to 600 million over a period of 10 years. A smaller supply will equal greater purchasing power for the few that hold it but what about the majority who have none to trade at all? Welcome to Recession/Depression

[joepeeler34]

@dogbarker1981 Why did Continental collapse? The Greenback was phased out over time. The Union govt. first resorted to Demand Notes but they were so debased that they weren't accepted. The govt. then resorted to irredeemable Greenback Notes that people were forced to take by law. The government resorted to the printing press to pay for its bills. That was the point of the Legal Tender Laws.

The South did the same thing. Paper money always gets debased....ALWAYS.

[dogbarker1981]

@joepeeler34 I already answered the Continental question in the previous statement. Yep printing press at 0% or borrow more money at 25 to 30% interest from the banksters. Lincoln decided to go the 0% route and it worked. Again my point is bankers ramming laws into government killed debt free fiat money that worked. If a nation has no gold to issue as money what then?

[joepeeler34]

@dogbarker1981 You referred to continental script. Government resorts to legal tender laws if irredeemable demand notes aren't accepted.

You are setting up a false choice. We don't have to either one of those. Why not private mintage and 100% fractional reserve banking?

It "worked" all right. Savers were wiped out. Creditors got the shaft. It became almost impossible for businessmen to calculate in a currency that was so wildly fluctuating, etc.

Bill Still doesn't quite get it.

[joepeeler34]

@dogbarker1981 The big problems with today's monetary system is that the government has given monopoly powers to create money to a cartel. The Constitution refers to "to COIN" money. How exactly do you coin paper?

It refers to accurate "Weights and Measures." How exactly could that phrase be referring to paper money? It was referring to the weight, purity, and face value of gold and silver coins."

The Legal Tender Laws are unconsitutional as is the Federal Reserve. Paper is political money.

[joepeeler34]

@dogbarker1981 It's the monopoly that screws everything up. Competition and choice are the great disinfectants. Money was originally an emergent order. It was not a creation of the state. The state sought to have the monopoly power because it could profit by seignoriage and for the monarchs prestige. They would invoke the Divine Right of Kings for this monopoly privilege.

Today, the government invokes the Divine Right of the State. I am not a subject. I want choice and competition.