I understand that in the hard money system, gold is supposed to be the standard, but you have to admit, it is an arbitrary standard.
well.. Chris already answered that. Thanks Chris!
As to the Gilligan thing... more excited that I would be to find a chest filled with the equivalent value in 1960's dollar bills, I'll tell you that.
This notion that there are unseen forces who have multi generational plots to topple civilizations (through fiat money, the illuminati or liberal education) is just crazy crazy crazy.
When were we saying there were?
I'll agree with you on that. Never assign to conspiracy that which is just as easily explained by incompetence.
And on to my friend Vlad...
I guess I don't understand your argument then. Are you arguing that we could impliment a gold standard which was different than the classical period one, in which the problems of that period would be eliminated? The reason why I ask is because it is generally conceded that the classical period is when the gold standard "worked" in practice. The fact that the system failed means that any new system you advocate should be able to deal with the reasons why the old system failed. Specifically the foreign reasons.
My argument is as follows --
1 -- The Gold standard was quite stable while it lasted, but collapsed due to too much State meddling. It's Achilles Heel was that the rate of exchange was gov't mandated, with each nation defining their currency in terms of gold. When the State can revalue their currency, as FDR did in the 30's, the idea of gold as a "standard" becomes meaningless. It's a fiat system with gilded window dressing.
2 -- The major foreign stresses -- I presume you're referring to France calling in her debts in gold, thus creating a drain out of the US. Again we get to the issue of State mandates. As I recall it, the problem stemmed from overissuing currency as compared to the reserves. If for every dollar issued you have only 50 cents wirth of gold in your reserves, you are leaving the principle of the Gold Standard.. effectively negating the central advantage of the metallic backing.
SO...
The solution I see here is not to take the gold backing out from a gov't currency, but rather to remove the gov't currency from the gold. Thus, an ounce is always an ounce... everywhere. A gram is always a gram... everywhere. This prevents the revaluing problem.
This doesn't mean that a gold-based (not backed) money supply would need to be strictly cash-and-carry, any more than it is now. There are ALREADY institutions that allow electronic transfer of metals in grams, ounces, whatever from one person to another, much as paypal does now. Further, they 100% back their stores with warehoused metal, and release it as bullion for a marginal seignorage fee. Since there is no partial reserve like the classical state-based Gold Standard, this prevents the "France calling in her debts" problem.
And again.. there's no reason this need be done by a State treasury. Anyone with the metal who wanted to play bank could do it, provided they play by the rules.
The potential problem is an old one, and here you can bring in your troopers if you want.
Maintaining the 100% reserve requirement. I tend to think an "AMA" type of arrangement, a professional board of standards which required regular audits of storage vs. accounts would be ideal, though a gov't review board might do the same job.
Either way, issuing more credit over the reserves held would be essentially counterfitting, and punishable as such. As I ceded Delmar, there will always be theives. The trick is to make it hard to be a theif.
So there.. that's an alternate system for you. Yes, it's still "barter" of a fashion I suppose. But remember -- money is a tool. A human invention for facilitating trade. And such a private system, providing that reserves are transparently monitored and verified, is at least as stable a system as fiat currency.
Unemployment... yeesh. I've been typing WAY to long. How about I cede on that for now, and we get back to it later? Time to get back to work.
